Major U.S. equity indexes finished the week lower as elevated Treasury yields, renewed U.S.-Iran tensions, higher oil prices, and weakness in semiconductor and artificial intelligence (AI)-related shares broadly weighed on investor sentiment. Mixed takeaways from several retail earnings reports also appeared to contribute to the week’s cautious tone. The Nasdaq and Russell 2000 Index shed 2.05% and 1.65%, respectively. The Dow Jones Industrial Average held up best, falling 0.85%. Long-term U.S. Treasury yields rose early in the week, with the yield on the 30-year U.S. Treasury bond reaching its highest level since 2007. Rising concerns around the U.S. fiscal outlook and heavy government and corporate debt issuance including financing tied to AI capex appeared to contribute to the sell-off. Higher oil prices amid renewed tensions between the U.S. and Iran also added to inflation concerns. Treasuries rallied on Wednesday after the Treasury Department announced that it would at least double the size of its planned long-term debt buybacks. However, much of the move reversed late in the week. Meanwhile, Fed minutes highlight uncertainty over inflation outlook. The pan-European STOXX Europe 600 Index ended the week down 0.56% while Japan’s Nikkei 225 Index fell 3.93%. Gold broke above $4,600 as the 'Hard Asset / debasement trade’ returned. Bitcoin surged over 20% this week, briefly approaching $80,000, its strongest weekly advance in more than two years. The dollar fell even as Treasury Yields rose…
Have a great weekend
Charles & Syz Research Lab