Dow drops more than 500 points as tech slumps and Treasury yields spike
The Dow Jones Industrial Average closed Friday's session more than 500 points lower as a sharp sell-off in technology stocks and a surge in the 10-year Treasury yield dragged the major indexes down. After fresh inflation data, futures markets began pricing in a Federal Reserve rate hike rather than the cuts traders had previously expected.
The Dow Jones Industrial Average closed Friday more than 500 points lower while the S&P 500 and Nasdaq also booked steep declines. Technology shares led the retreat, with investors letting the AI-driven rally pause after fresh inflation data. The 10-year US Treasury yield climbed toward multi-year highs, weighing on equity valuations across the board.
Driving the move is a string of sticky inflation indicators in recent months and a growing market view that the Federal Reserve may pivot toward another rate hike rather than the cuts traders had priced in. According to CNBC, futures markets shifted after Friday's data to imply tightening at upcoming meetings instead of easing. The reversal dragged the bond market into a sharp sell-off after weeks of calm.
Attention now turns to next week's earnings calendar. Reports from Nvidia, Walmart and other heavyweights are expected to test whether the AI capital-spending wave and US consumer spending remain intact. Analysts warn that if Treasury yields keep climbing, technology-heavy indexes could face further pressure heading into summer trading.
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