U.S. stocks were mixed on Friday as stubbornly high inflation and a rebound in rates continue to weigh on investor sentiment.
The Dow Jones Industrial Average rose 130 points, or 0.39%, rallying from lows of the day boosted by shares of Amgen and United Health, which each gained more than 2%.
The S&P 500 shed 0.27% to end the day at 4,079.23, and the Nasdaq Composite fell 0.58% to close at 11,787.27. Energy was the biggest laggard across indexes. Albemarle and Devon Energy fell more than 10% and 4%, respectively, dragging down the S&P 500.
Yields on the 10-year and 2-year U.S. Treasury bonds hit levels not seen since November, weighing on equities early in the session.
Stocks are mixed on the week. The Dow ended down 0.13% for the week, its third negative week in a row — a first since September. The S&P 500 has shed 0.27% for the week, its second negative week in a row. The Nasdaq rose 0.59% on the week.
Investors continue to worry about how the economy and equities will hold up as the Federal Reserve hikes rates to tame stubbornly high inflation. In a Friday speech, Federal Reserve Governor Michelle Bowman said there’s a long way to go before the central bank reaches its target of 2% inflation.
“We have been in a very contentious tug of war between the equity markets and the treasury markets,” said Art Hogan, chief market strategist at B.Riley. While Treasurys are signaling that the Fed is going to hold rates higher for longer, equities are not listening and instead looking for a soft landing.
“Equity investors seem to be looking through a couple more rate hikes and looking forward to a pause,” he added.
The moves came after major averages shed more than 1% on Thursday, after the Labor Department said the producer price index — an inflation metric that tracks wholesale prices — rose 0.7% last month. That was more than economists expected.
Next week, investors will continue to watch earnings season for signs of consumer strength or weakness. Home Depot, Walmart and Etsy are scheduled to report results next week.
