Investors shift focus to persistent inflation data, raising expectations for Federal Reserve rate hikes in 2024.
Global equity markets retreated Friday as bond yields surged, reversing recent gains driven by artificial intelligence-related tech stocks. The shift followed April’s higher-than-expected inflation readings, fueling concerns that price pressures may persist or accelerate in coming months.
The S&P 500 and Nasdaq pulled back after reaching record closes earlier in the week, while the Dow Jones Industrial Average dropped 432.76 points, or 0.86%, to 49,630.70. Traders increased bets on Federal Reserve rate hikes this year, with the 10-year Treasury yield climbing sharply amid the sell-off.
Oil prices also fluctuated on Middle East tensions and trade uncertainty, adding to inflation worries. Analysts noted markets had previously overlooked economic signals in favor of momentum-driven AI trades, but are now refocusing on macroeconomic risks.