Weekly Recap: S&P 500 and Nasdaq Post Weekly Gains Amid Bond Market Volatility

TLDR

• The Dow rose 479 points Friday, gaining 0.9%, while the S&P 500 and Nasdaq each climbed 0.5%
• All three major indexes finished the week higher despite a midweek selloff
• The 10-year Treasury yield hit its highest level since 2007 before pulling back slightly on Friday
• Oil prices dropped on reports of possible progress toward reopening the Strait of Hormuz
• Fed funds futures show more than a 60% chance of an October rate hike

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U.S. stocks closed higher on Friday, wrapping up a choppy week on Wall Street. The gains came even as Treasury yields surged to levels not seen in decades.

The Dow Jones Industrial Average climbed 479 points, or 0.9%, to end at 51,829. The S&P 500 and Nasdaq Composite each rose about 0.5%.

For the week, the Dow added 0.3%. The S&P 500 gained 1.2%, and the Nasdaq rose 2%, even after a midweek pullback.

Akamai Technologies was one of the standout gainers Friday. Shares rose 3% after the company announced a multiyear deal with Anthropic.

Meta Platforms also had a strong week. The stock jumped nearly 13% on excitement around its new artificial intelligence agent, called Muse.

Bond Market Volatility Weighs on Sentiment

The bond market saw sharp swings this week. The 10-year Treasury yield reached its highest level since 2007, touching 5.228% before easing back.

The last time US Treasury yields were this high, total US national debt stood at just $8.9 trillion.

Today, US debt stands at $40.1 trillion. That’s +$31.2 trillion more, or over 4.5 TIMES higher.

This means every 1 percentage point in the average cost of servicing the debt now… https://t.co/PXUZmAuKDa pic.twitter.com/xnKNXeMGuR

— The Kobeissi Letter (@KobeissiLetter) September 25, 2026

It closed Friday at 5.18%, still a fresh 19-year high. The 30-year yield settled at 5.5%, having broken above that mark for the first time in 22 years.

The two-year yield edged slightly lower, ending at 4.862%.

Rising yields have been driven by a few factors. These include hawkish comments from Federal Reserve officials, high energy prices tied to the conflict in the Middle East, and a stronger than expected purchasing managers report.

Fed funds futures currently show a roughly 64% to 66% chance of a rate hike in October. Markets are pricing in three more quarter-point hikes by the end of 2027.

Oil Prices Drop on Hormuz Optimism

Oil prices fell during the week on reports that U.S. and Iranian negotiators were discussing a deal to reopen the Strait of Hormuz. Iran has reportedly asked the U.S. to return to a memorandum of understanding from June.

West Texas Intermediate crude dropped 2.33% to settle at $92.41 a barrel. Brent crude, the international benchmark, fell 2.14% to $104.32 a barrel.

Traders were also watching developments between the U.S. and China this week. Trade talks continued during Chinese President Xi Jinping’s visit to the U.S.

Treasury Secretary Scott Bessent said the two countries agreed to extend their trade truce by two months. More details on the negotiations are expected soon.

Consumer sentiment data also came in Friday. The University of Michigan’s September reading weakened but was not as low as first estimated.

The survey showed that consumers’ inflation expectations rose, including for the long term. This adds another factor for the Federal Reserve to weigh in its coming decisions.

Some analysts note that continued high yields could eventually weigh on stock prices and growth. Others say the economy has so far remained resilient despite the pressure.

Investors will continue watching bond yields, oil prices, and trade developments in the days ahead for further direction.