Chinese ADRs highlighted the session as Alibaba climbed more than 4%. The three major indices finished mixed, with the Nasdaq adding nearly 0.4%; the 10-year Treasury yield briefly reclaimed the 5% threshold; optical communications stocks were active as Coherent rose over 7%.
US stocks closed mixed on Friday, wrapping up a volatile week of trading. Market participants contended with rising Treasury yields, elevated crude prices, and the Federal Reserve's first rate hike in three years, all while digesting a host of macro developments. At the closing bell, the Dow Jones Industrial Average slipped 95.40 points, or 0.18%, to 51,682.64. The Nasdaq Composite gained 0.39% to 26,522.55, while the S&P 500 edged up 0.17% to 7,650.50.
The Dow posted its third consecutive weekly loss, sliding 1.7% for the week—its worst weekly performance since March. The S&P 500 dipped roughly 0.1%, while only the tech-heavy Nasdaq managed a gain, rising 0.7% on the week.
Key Stock Movements
Mega-cap tech names were split, with Nvidia and Amazon adding more than 1%, while Apple, Tesla, and Microsoft closed lower. The Philadelphia Semiconductor Index advanced 2.78%, with Applied Materials jumping 6.51% and ARM gaining 4.04%. Memory chip plays were notably strong, as SanDisk soared 10.99%, Seagate Technology rose 6.93%, Western Digital added 4.13%, and SK Hynix climbed 2.46%.
The optical communications sector was active, with Coherent surging 7.22% and Lumentum adding 4.17%. Berkshire Hathaway slipped 0.04% following the company's announcement that Warren Buffett will step down as chairman and transition to honorary chairman. A rally in Bitcoin lifted crypto-related names, with Coinbase, Strategy, and Robinhood all climbing between 9.1% and 16.4%.
The Nasdaq Golden Dragon China Index gained nearly 0.8%, with Alibaba up 4.33%, PDD Holdings adding 1.51%, and JD.com rising 1.05%. Baidu slipped 0.11%, while NetEase declined 0.37%.
Market Overview
On Wednesday, the Federal Reserve unanimously voted to raise the federal funds rate to 3.75%–4.00%, marking the first tightening of monetary policy since July 2023 and signaling at least one more hike this year. According to the CME FedWatch tool, financial markets currently price a 55.4% probability of another rate increase at the Fed's October meeting, up from 42.5% last Friday and 7.2% a month ago.
Stifel Chief Economist Lindsey Piegza commented in a research note: "Inflation has remained significantly above target for over five years, and we've even gone through a rate-cutting cycle during that period. The new Fed leadership under Warsh is now taking the right step toward curbing dangerously high price pressures."
Rising Treasury yields weighed on equities. The 10-year yield briefly broke above 5% earlier in the week, reaching its highest level since 2007. After retreating on Thursday, it again touched the 5% mark on Friday before settling at 4.995%, up 5.4 basis points. Despite this, the tech-led rebound suggests investors are looking past the "higher for longer" rate outlook, choosing to place fresh bets on the artificial intelligence trade and the belief that AI will continue to support corporate earnings.
Scott Welch, Chief Investment Officer at Certuity, noted: "With the Fed's rate hike done, some of the week's uncertainty has been removed." However, Welch cautioned that this hike is not a one-off move. He stated that a rate-hiking cycle has only just begun, and it could weigh on stock market performance in the months ahead. "Whether it's October or after the election, I expect the Fed to hike at least once more in 2026, and there's a good chance of one or two additional hikes in 2027. I'm not bearish on stocks, but I think the market is likely to remain in a choppy, grinding pattern for the rest of the year."
On the geopolitical front, President Trump commented on Iran on September 18, saying "the war will soon be over," reiterating that Iran will not possess nuclear weapons. He also stated that once the conflict with Iran concludes, gasoline prices will fall back to previous levels or even lower. Additionally, Trump indicated that the US is in contact with Yemen's Houthi rebels.
On the economic data front, US industrial production was flat in August, following a 0.2% gain in July. Manufacturing output declined 0.3% overall; excluding a 1.2% drop in motor vehicles and parts, manufacturing output fell 0.2%. Utility output rose 1.8%, driven primarily by a significant increase in electricity generation, while mining output edged up 0.1%. The Conference Board's Leading Economic Index fell 0.1% in August, after rising 0.2% in July. Four components contributed negatively, with a sharp deterioration in business expectations being the primary drag; four others contributed positively, with stock prices and the interest rate spread standing out.
Commodities Performance
International oil prices closed lower, with West Texas Intermediate crude for October delivery falling $1.61 to settle at $100.30 per barrel, a decline of 1.58%. Brent crude for November delivery dropped 95 cents to $103.87 per barrel, down 0.91%.
Precious metals rebounded from session lows, with COMEX gold futures for September delivery gaining 0.59% to settle at $4,385.90 per ounce, while COMEX silver futures rose 1.66% to $66.55 per ounce.