Key Development
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STOCKS
U.S. equity markets extended a losing streak on Friday as Treasury yields climbed to fresh multi-year highs and oil prices surged further on persistent geopolitical risk, compounding investor unease heading into a data-heavy stretch. The S&P 500 fell 1.24 percent to 7,408.50, the Nasdaq Composite dropped 1.54 percent to 26,225.14, and the Dow Jones Industrial Average shed 537.31 points to close at 49,526.17. The moves followed a CPI reading for April that topped forecasts at 3.8 percent, reinforcing concerns that inflationary pressure—now partly driven by elevated energy costs—has not abated. The VIX, Wall Street’s gauge of near-term volatility, spiked to 18.00, its highest reading in several weeks.
Nvidia’s earnings release late Thursday offered a rare bright spot: the chipmaker posted $54.9 billion in quarterly revenue, a 56 percent increase year-over-year, driven by accelerating demand for artificial intelligence infrastructure. The results briefly lifted sentiment in after-hours trading. Even so, the stock still fell 4.4 percent on Friday, weighed down by broader sector rotation away from high-valuation technology names as discount rates rose. Intel fell 6 percent, AMD declined 5.7 percent, and Micron gave back 6.6 percent. Boeing shed 2.8 percent after reporting an underwhelming net order book for the quarter. Cerebras Holdings, the AI chip designer that completed its public listing earlier this month, slid approximately 10 percent as post-IPO profit-taking intensified. Microsoft rose 4 percent after activist investor Bill Ackman’s Pershing Square disclosed a large position in the software giant.
Berkshire Hathaway’s first-quarter 13F filing drew market attention for its breadth of activity. Warren Buffett’s firm disclosed a new $2.6 billion stake in Delta Air Lines, representing roughly 10 percent of the carrier’s shares outstanding, a notable re-entry into the airline sector after years of avoidance. Berkshire also tripled its position in Alphabet, while trimming stakes in Amazon, UnitedHealth Group, and Visa. The firm sold approximately $8 billion in Chevron shares during the quarter. Separately, SpaceX accelerated its long-awaited IPO timeline: the company is now targeting a June 11 pricing on the Nasdaq, seeking a valuation of $1.75 trillion in what would be the largest public listing in U.S. history.
COMMODITIES
Oil prices extended gains as ongoing disruption in and around the Strait of Hormuz—the transit corridor for roughly one-fifth of global oil flows—continued to unsettle energy markets. WTI crude settled above $101 per barrel, up more than 4 percent for the session, while Brent crude traded above $109 per barrel. Iranian military activity in the Persian Gulf has disrupted tanker traffic and prompted several maritime insurers to widen exclusion zones, elevating freight costs and tightening regional supply. Goldman Sachs revised its end-of-year Brent forecast to $105 per barrel, citing the sustained elevation of geopolitical risk premia. National average gasoline prices stood at $4.39 per gallon, a level that continues to factor into consumer spending calculations at a time of elevated inflation expectations.
Gold and silver both gave back ground as the dollar strengthened. Gold settled around $4,559 per ounce, down roughly 2.7 percent for the session, as some safe-haven flows rotated into U.S. assets amid the rate-hike recalibration. Silver fell in tandem. Bitcoin slipped to approximately $79,080, a decline of nearly 3 percent as crypto markets reacted to the same liquidity conditions pressuring risk assets broadly.
FIXED INCOME
Treasury yields climbed again Friday as stronger-than-expected CPI data and elevated oil prices reinforced a reassessment of the Federal Reserve’s rate path. The 10-year U.S. Treasury note yield approached 4.60 percent, touching its highest level in a year. A 30-year bond auction cleared at a yield above 5.1 percent—the first time the long end of the curve has printed above 5 percent since 2007. The readings reflect a meaningful shift in market expectations: futures now price a 45 percent probability of at least one additional Fed rate hike before year-end, a stark reversal from one month ago, when the same contracts implied just 1 percent odds of a hike. The move higher in real yields is pressuring equities, especially those priced at high duration multiples, and is contributing to dollar strength against emerging-market currencies.
CURRENCIES AND TRADE
The dollar index rose to a five-week high as the interest rate differential between the United States and other major economies widened in favor of dollar-denominated assets. The Egyptian pound, Brazilian real, Thai baht, and South Korean won all faced fresh pressure. The Fed held its benchmark rate at 3.75 percent at its most recent meeting, though the decision carried an 8-4 dissent—one of the most divided votes in recent Fed history. Governor Christopher Waller and other officials have signaled that the data dependency framework remains intact, and that further rate moves hinge on incoming inflation and labor market readings.
On trade, U.S. and Chinese officials concluded a round of negotiations in Geneva with a joint statement calling for stabilization of commercial relations and a commitment to ongoing dialogue. Unlike the comprehensive framework many analysts had anticipated, the agreement stopped short of specific tariff reductions or enforcement mechanisms. A subsequent call between Presidents Trump and Xi addressed Taiwan and broader strategic tensions but produced no concrete economic pledges. The absence of a breakthrough keeps the bilateral tariff regime largely intact, sustaining cost headwinds for U.S. importers of manufactured goods and contributing to the above-trend inflation readings that are complicating the Fed’s policy calculus.
