The Dow Jones and S&P 500 rose to record closing highs on Friday as stocks rallied on stimulus, vaccine, and economic reopening optimism, which encouraged the continued market rotation into cyclical names. Meanwhile, the Nasdaq closed lower as surging bond yields sparked valuation fears and a rotation outside of mega-cap tech stocks.
The 10-year U.S. Treasury yield climbed more than 0.1% to 1.64% at its session high on Friday, which was the benchmark's highest level since the beginning of the coronavirus pandemic.
Despite the volatility, all three market benchmarks settled with weekly gains, with the S&P rising 2.6%, the Nasdaq climbing 3%, and the Dow outperforming with a 4% increase.
Meanwhile, U.S. consumer sentiment unexpectedly jumped to its highest level in one year for March to 83.0, according to the University of Michigan's preliminary monthly survey. That increase was up from February's final reading of 76.0 and is the reading's highest level since the start of the pandemic.
Here's how the market settled to close out the week:
S&P 500 Index (NYSE: SPY): +0.11% or +4.51 points to 3,943.85
Dow Jones Industrial Average (NYSE: DIA): +0.91% or +296.77 points to 32,782.36
Nasdaq Composite Index (NASDAQ: QQQ): -0.59% or -78.81 points to 13,319.86
For Stocks, bank names--Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM), Morgan Stanley (NYSE: MS) and Wells Fargo (NYSE: WFC)--rose on rising Treasury rates. Tech names-- Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB), and Microsoft (NASDAQ: MSFT)--declined amid the market's rotation. Novavax (NASDAQ: NVAX) shares jumped after the biotech demonstrated that its coronavirus vaccine candidate is 96% effective against the original COVID strain.
For Sector Performance, sectors on the S&P 500 rose mostly higher on Friday, with only Information Technology (NYSE: XLK) and Communication Services (NYSE: XLC) retreating into negative territory. Performance gains were lead by Real Estate (NYSE: XLRE), Industrials (NYSE: XLI), Utilities (NYSE: XLU) and Financials (NYSE: XLF).
For Commodities and Currency, the U.S. Dollar (NYSE: UUP) rose slightly on Friday following a jump in U.S. Treasury yields as investors grew concerned again about the U.S. economic reopening sparking a rising in inflation. The dollar index, which tracks the greenback against six other rival currencies, bumped up 0.25% at 91.668. Gold (NYSE: GLD) also increased modestly as weakness in equity markets outweighed concerns surrounding rising Treasury yields. Spot gold gained 0.2% at $1,724.16 per ounce, while U.S. gold futures settled down 0.2% at $1,719.80 per ounce. Crude oil futures stabilized near $70 per barrel on Friday, supported by continued optimism towards demand recovery for the second half of the year. International benchmark Brent Crude (NYSE: BNO) edged 0.3% lower at $69.41 per barrel, while domestic index West Texas Intermediate (NYSE: USO) declined 0.3% at $65.85 each.
For the week ahead, market participants won't have much to react to in the beginning of the week. Federal Reserve Chairman Jerome Powell is set to speak on the economy on Wednesday, which may drive the market.