This decline marked the index’s third consecutive weekly loss and its weakest week since March. Meanwhile, the S&P 500 rose 0.2% to close at 7,650.50, and the Nasdaq Composite gained around 0.4% to finish the week in positive territory.
Stock Futures and Index Movements Following Federal Reserve Rate Hike
The market adjustments followed a decision by the Federal Reserve to raise its benchmark interest rate by a quarter percentage point, marking the central bank’s first rate increase in three years. Following the announcement, investors continued to assess higher interest rates, bond yields nearing 5%, and the outlook for inflation. CME FedWatch data showed a 47.1% probability of another quarter-point increase and a 42.4% probability of a total half-point of further hikes through December. JPMorgan Chase CEO Jamie Dimon noted that it remained unclear whether inflation had been brought under control.
Treasury Yields, Oil Prices, and Sector Performance
Bond yields remained a primary pressure on equities, with the 10-year Treasury yield ending the week at 4.995%, putting it just below the 5% threshold. Additionally, the U.S. 2-year Treasury yield closed at 4.741%, reaching its highest 3 p.m. close since July 1, 2024.
Oil prices offered some market relief by falling back below $100 a barrel after previously climbing above that level, with Brent crude futures trading around $103 a barrel earlier. Energy markets remained sensitive to disruptions linked to the war in Iran and shipping through the Strait of Hormuz.
Technology stocks performed relatively well compared to other market sectors, with semiconductor shares recovering from earlier losses to finish the week slightly higher. Chip stocks had previously faced pressure after Anthropic and OpenAI called for a slower pace of artificial intelligence development due to safety concerns. However, technology shares also benefited as some market participants redirected their attention toward the artificial intelligence trade. UBS Global Wealth Management chief investment officer Mark Haefele stated in a monthly investment outlook that equity rallies could persist through the next six to twelve months, noting that earnings growth remains strong and lower inference costs stimulate artificial intelligence adoption.
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