US stocks fell sharply on Friday, pulling back from record highs set a day earlier, as a global sell-off in government bonds pushed Treasury yields to their highest levels in about a year.
The S&P 500 dropped roughly 1.2 per cent, the Dow Jones Industrial Average lost about 1 per cent, or some 530 points, slipping back below 50,000, and the technology-heavy Nasdaq Composite fell about 1.5 per cent.
The benchmark 10-year Treasury yield climbed to around 4.59 per cent, while the 30-year yield reached about 5.13 per cent. Bond prices fall as yields rise, and higher yields tend to weigh on equity valuations.
The moves followed a week of inflation data that came in hotter than expected. Consumer prices rose at a faster pace than forecast, and wholesale prices recorded their steepest annual increase since 2022.
Economists have linked the price pressures in large part to an energy shock stemming from the war with Iran, which has pushed crude oil sharply higher. Traders increasingly doubt the Federal Reserve will be able to cut interest rates this year, and some now see a possible increase.
The Nasdaq’s decline was led by a fall of about 4 per cent in Nvidia, which is due to report quarterly earnings next week, and by weakness in other chipmakers.
The pullback interrupted a run of records on Wall Street, and underscored how sensitive equities have become to the path of inflation and interest rates after a long rally.