Dow jumps 190 points as oil retreats but Treasury yields stay elevated

• Treasury yields hit their highest levels since 2007 (10-year) and 2004 (30-year), with Fed funds futures pricing a 68% probability of an October rate hike amid hawkish Fed comments and high energy prices
• Oil prices fell approximately 2% (WTI to ~$92) after Iran proposed reopening the Strait of Hormuz within seven days if certain US conditions are met and nuclear talks resume
• Technology stocks showed mixed performance: Akamai surged on a multiyear AI deal with Anthropic, while Meta approached $2 trillion valuation, though higher yields are pressuring long-duration tech valuations

Market Summary

Market Performance:

US equities posted modest gains Friday, with the Dow Jones Industrial Average rising 190 points (+0.3%), the S&P 500 up 0.3%, and the Nasdaq Composite advancing 0.4%. Despite the daily gains, the Dow remained on track for a fourth consecutive weekly decline, down 0.1% for the week, while the S&P 500 and Nasdaq tracked toward weekly gains of 1% and 2%, respectively.

Treasury Yields:

Bond markets continued pressuring equities as the 10-year Treasury yield reached 5.188%, its highest level since 2007, while the 30-year yield hit 5.49%, the highest since 2004. Higher yields are compressing equity valuations by increasing borrowing costs and making government bonds more attractive. Fed funds futures priced a 68% probability of an October rate hike, driven by hawkish Fed comments, strong PMI data, and elevated energy prices.

Oil Markets:

Crude prices retreated on diplomatic hopes, with West Texas Intermediate falling 2% to approximately $92/barrel and Brent crude declining 1% to around $104/barrel. Iranian Foreign Minister Abbas Araghchi proposed reopening the Strait of Hormuz within seven days if the US meets specified conditions and resumes nuclear talks.

Technology Sector:

Akamai Technologies surged 14% on a multiyear deal with Anthropic, boosting AI infrastructure sentiment. Meta Platforms approached a $2 trillion valuation, reaching approximately $1.98 trillion on strong AI-driven gains.

Market Implications:

Investors face a complex environment where AI monetization drives tech gains while elevated Treasury yields pressure long-duration growth stocks, creating valuation headwinds despite positive sector developments.