Summary
The stock market took a beating on Friday. Treasury bond yields soared as inflation fever has come back to haunt stock prices. Oil prices started spiking in the beginning of March and have been elevated for over two months. Fixed-income investors didn’t start worrying about inflation ramping up until this past week. This was the first real spike in yields, but they have been ticking higher from depressed levels since late March. Some stocks (AI-related) seemingly were ridiculously extended, and it took higher yields to pierce the balloon. The S&P 500 fell 1.2% but was able to extend its weekly winning streak to seven. Both the Nasdaq and the Nasdaq 100 lost 1.5% and just missed their seventh week of gains. All three of the major indices traced out weekly doji candlesticks, a sign of indecision that often represents the beginning of a trend change (especially when the indices are stretched). Energy (+2.4%) was the only winning sector on Friday, with Materials down 2.7%, Utilities down 2.3%, and Industrials, Consumer Discretionary, and Information Technology all down 1.8%. The 10-year Treasury yield popped 13 basis points (bps) to 4.6% on Friday, the 5-year soared 13.7 bps to 4.26%, and the 2-year rose 4.5 bps to 4.08%. It was the highest close for the 10-year since May 2025, and the highest results for the 2-year and 5-year since February 2025. The 10-year appears to be emerging from a
