US equities closed lower on Friday as rising Treasury yields weighed on investor sentiment, unwinding most of the gains posted Thursday after the latest rate hike. The tech-heavy Nasdaq Composite slipped 0.1%, the broad S&P 500 index lost 0.2%, and the Dow Jones Industrial Average dropped 0.4%.
Bond Yields Surge
The move came as US government bond yields climbed across the curve. The two-year Treasury yield rose 1.5% to 4.75%, marking its highest level since June 2024. Meanwhile, the benchmark 10-year Treasury yield pushed above the 5.00% threshold.
The Federal Reserve’s 25-basis-point rate hike on Wednesday continued to reverberate through markets. Japan’s central bank also raised rates by 25 basis points overnight, underscoring a global shift toward tighter monetary policy.
Higher bond yields typically make equities less attractive relative to fixed-income assets and raise borrowing costs for corporations. Sectors with heavy debt loads, such as materials and utilities, felt the pressure, while financial and real estate names also struggled.
Analysts also noted that the ongoing artificial intelligence rally and hyperscalers’ heavy capital expenditure have contributed to increased bond issuance, adding further upward pressure on yields.
Triple Witching Adds to Market Turbulence
Friday was also the third Friday of September — a quarterly triple witching day when stock options, stock index futures, and stock index options all expire at the close. Such sessions often bring above-average trading volume and sharper volatility as investors adjust or roll over their positions. The final hour of trading, from 15:00 to 16:00 EST, can be especially turbulent, with triple witching days frequently recording double the typical daily volume.
S&P 500 Tests Key Support
The S&P 500 opened sharply higher before reversing course to test the June 2 high at 7,621. According to FXStreet’s technical analysis, the index appeared to find support at the 50-day simple moving average during the morning session. A sustained break below 7,621 could open the door to Wednesday’s low near 7,508, while a move higher might face resistance around 7,800 next week or before the end of September.
In other news, Warren Buffett stepped down as Berkshire Hathaway chairman after 61 years, with his son Howard Buffett taking over the role. Greg Abel remains CEO of the conglomerate.
Market participants now turn their attention to upcoming economic indicators and corporate developments before making their next investment moves.
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