The current bond market is causing stocks to fall on Friday, as the US 10Y Note Yield climbed above 4.55% for the first time since May 2025. The battle with inflation and the intensifying bond market is building up, and major indices have taken a hit to end the week. Thursday marked a winning session for the indexes, with the Dow reclaimed the 50,000 level, and the S&P 500 closed above 7,500 for the first time. However, those gains were all reveresed come Friday.

The S&P 500 shed 0.9%, while the Nasdaq Composite lost 1.3%. The Dow Jones Industrial Average also fell 0.8%, by 407 points. Treasury yields jumped, pressuring stocks, with the 30-year rate topping 5.1% and hitting its highest level since 2025. A series of reports this week showed inflation was revving back up as oil prices remain elevated from the Middle East conflict. Higher rates could hit the high-growth stocks the hardest.

Additionally, in just 2 hours after the opening bell in NYC, the Nasdaq 100 extended losses to -2% on the day, now on track for its biggest daily decline since March 26th. Following the frenzied rally in AI and tech stocks, investors are beginning to reassess risks due to the bond report. Odds of an interest rate hike by the US Federal Reserve are also climbing due to the inflation rise in the latest CPI report, which is also scaring investors.

Furthermore, the latest stock pullback comes after President Trump concluded his visit to Beijing with Chinese President Xi Jinping before flying back to Washington. The two-day summit struck a business-friendly tone, involving 16 top US executives and delivering new deals for Boeing (BA) and Nvidia (NVDA). However, Trump’s visit left the US economy in a state of unrest, with the inflated CPI report and now the US 10Y Note Yield in disarray.