Tech Giants Keep a Lid on Stocks as Yields Climb: Markets Wrap

A renewed slide in tech megacaps and mixed economic data left stocks struggling for direction on Friday. Bond yields rose.

(Bloomberg) — A renewed slide in tech megacaps and mixed economic data left stocks struggling for direction on Friday. Bond yields rose.

In a choppy trading session, the S&P 500 closed at a one-month low with a drop of just 0.1%. The Nasdaq 100 notched its longest weekly losing streak this year, hovering around 15,000. It last finished below that mark in June. Nvidia Corp. — which has more than tripled in 2023 — extended a four-day decline to 10%. The Dow Jones Industrial Average posted a mild gain.

There’s little question stocks have lost a lot of their upside momentum, according to Matt Maley, chief market strategist at Miller Tabak + Co.

“As we move closer to the usually volatile September/October time frame, it does seem like the ‘dippers’ are losing some of their strength,” Maley noted. “This does not mean that the stock market will roll over in a serious manner over the next month or two, but it does raise the odds of a correction in the not-too-distant future.”

Earlier Friday, the S&P 500 traded within a whisker of its 50-day moving average. A breach of that threshold could portend further losses, according to some technical analysts.

Still, with equities pressing moderately toward oversold territory on a short-term basis, the path lower wouldn’t be a straight one, according to Dan Wantrobski at Janney Montgomery Scott.

That means stocks are soon poised to attempt “another oversold rally effort,” he noted.

Equity Risk Premium

Bill Gross, the one-time bond king, said stock and Treasury bulls are wrong as both markets are “overvalued.”

The former chief investment officer of Pacific Investment Management Co. told Bloomberg Television that the fair value of the 10-year Treasury yield is about 4.5%, compared with the current level of 4.15%.

Early this month, a key market indicator that has been described as possibly the “most important number in finance” sank to its lowest since 2004, worrying investors that it was sending a bearish signal. Yet, history shows that despite the extreme move, the typically ominous sign is instead pointing to more gains. 

The plunge in the equity risk premium — which measures the difference between the earnings yield on the S&P 500 and the current rate on 10-year Treasury notes — signals stocks are getting overvalued relative to bonds. But a Bloomberg Intelligence analysis found the gauge is now at a level where returns for the S&P 500 historically averaged in high single digits over a 12-month horizon.

Treasuries are on course for a record year of inflows as investors chasing some of the highest yields in months pile into cash and bonds, according to Bank of America Corp. strategists led by Michael Hartnett. 

Cash funds attracted $20.5 billion and investors poured $6.9 billion into bonds in the week through August 9, they wrote in a note, citing data from EPFR Global. US stocks had their first outflow in three weeks at $1.6 billion.

Meantime, Friday’s economic reports did little to alter swap market bets that the Federal Reserve will pause its rate hikes next month. Traders also continued to expect the central bank to signal its battle against inflation isn’t over yet.

Consumer inflation expectations as measured by the University of Michigan unexpectedly fell in early August, despite higher gasoline and grocery costs. Meantime, producer prices grew last month by more than expected, primarily due to increases in certain service categories.


Elsewhere, UK bond yields climbed on data showing the British economy delivered its strongest quarterly growth in more than a year, a surprising show of resilience that will keep pressure on the Bank of England to raise rates further.

Oil posted its longest streak of weekly gains since mid-2022 as multiple reports forecasting increased demand gave a fresh boost to a rally built on increased supply-disruption risks and extended Saudi production cuts. 

Some of the main moves in markets:


  • The S&P 500 fell 0.1% as of 4 p.m. New York time
  • The Nasdaq 100 fell 0.7%
  • The Dow Jones Industrial Average rose 0.3%
  • The MSCI World index fell 0.5%


  • The Bloomberg Dollar Spot Index rose 0.1%
  • The euro fell 0.3% to $1.0947
  • The British pound rose 0.2% to $1.2699
  • The Japanese yen fell 0.1% to 144.96 per dollar


  • Bitcoin fell 0.2% to $29,362.46
  • Ether fell 0.4% to $1,842.1


  • The yield on 10-year Treasuries advanced five basis points to 4.15%
  • Germany’s 10-year yield advanced nine basis points to 2.62%
  • Britain’s 10-year yield advanced 16 basis points to 4.53%


  • West Texas Intermediate crude rose 0.4% to $83.12 a barrel
  • Gold futures fell 0.2% to $1,945.70 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rob Verdonck, Richard Henderson, Alex Nicholson and Cecile Gutscher.

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