U.S. equity markets ended the week on a sour note as benchmark Treasury yields surged to their highest levels in more than a year, reigniting concerns about the Federal Reserve’s policy trajectory. The S&P 500 shed 1.24% on Friday, May 15, closing at 7,408.50. The Nasdaq Composite fell 1.54% to 26,225.14, while the Dow Jones Industrial Average dropped 537 points to 49,526.17. For the week, both the S&P 500 and Nasdaq managed slim gains of approximately 0.3%, suggesting that the losses were concentrated in the final session.
The catalyst for the late-week pullback was a confluence of hotter-than-expected inflation data and a Treasury auction that underscored the government’s elevated cost of borrowing. The 10-year Treasury yield climbed to approximately 4.59%, its highest level in a year, while the 30-year yield topped 5.1% — the first time it has cleared that threshold since 2007. A closely watched 30-year bond auction drew demand that was weaker than anticipated, a signal that investors are growing more cautious about long-term U.S. debt.
The Federal Reserve concluded its two-day policy meeting on Wednesday, holding the benchmark interest rate at 3.75% for the fourth consecutive meeting. The decision carried an 8-to-4 vote, the most divided split since 1992, reflecting deepening disagreement among rate-setters over whether monetary policy is sufficiently restrictive. April’s Consumer Price Index came in at 3.8% year-over-year, topping consensus forecasts and suggesting that the disinflation trend that dominated 2025 has stalled. Futures markets have since repriced rate-hike odds, with traders now assigning roughly a 45% probability to at least one additional Fed rate increase before year-end.
Commodity markets remained the locus of global disruption. West Texas Intermediate crude settled at $105.42 per barrel, up 4.2% for the session, as ongoing tensions in the Strait of Hormuz disrupted shipments through one of the world’s most critical oil chokepoints. Brent crude climbed to $109.26 per barrel. Analysts estimate that the cumulative disruption has removed approximately 14 million barrels per day from global supply. The national average gasoline price held at $4.39 per gallon, a level that continues to weigh on consumer sentiment.
Gold retreated more than 2% to approximately $4,559 per ounce, while Bitcoin fell roughly 3% to around $79,080, reflecting a broad risk-off tilt across alternative assets.
In corporate news, Warren Buffett’s Berkshire Hathaway disclosed a new $2.6 billion equity stake in Delta Air Lines, representing approximately 10% of the airline’s outstanding shares — a notable bet on a sector Buffett famously avoided for decades. Berkshire also sold approximately $8 billion of Chevron stock and tripled its position in Alphabet, according to separate regulatory filings. Nvidia’s quarterly results drew scrutiny: the chipmaker posted $54.9 billion in revenue, a 56% increase year-over-year, yet shares fell 4.4% on Friday as investors had expected an even larger beat. Microsoft rose roughly 3% after Pershing Square’s Bill Ackman disclosed a substantial position in the software giant. Semiconductor stocks broadly underperformed, with Intel down 6%, AMD off 5.7%, and Micron falling 6.6%.
The U.S.-China summit in Geneva, convened amid escalating trade tensions, concluded without a substantive breakthrough. Both sides agreed to keep communication channels open and identified the Hormuz Strait as a shared concern, but no agreement on tariff reduction or trade concessions was announced. Meanwhile, the Mexican peso, Brazilian real, Thai baht, and South Korean won all came under pressure against a strengthening U.S. dollar, which traded at a five-week high on the index.
SpaceX is targeting June 11 for its IPO pricing on the Nasdaq at a valuation of $1.75 trillion, which would make it the most valuable company ever to list publicly.
Markets will turn their attention to upcoming retail sales data, housing starts, and the next batch of corporate earnings for further guidance on whether the equity resilience of the past month can be sustained in the face of higher-for-longer rates and persistent geopolitical risk.
