The Dow Jones Industrial Average and the S&P 500 closed at record highs on Friday, while the Nasdaq slumped as Treasury yields jumped to the highest level in more than a year.
The Dow, which also set an intraday record, finished 293 points, or 0.9%, higher at 32,778. The S&P 500 rose 0.1%, while the tech-heavy Nasdaq dropped 0.59%.
For the week, the Dow leaped 4.1%, the S&P 500 added 2.6% and the Nasdaq gained 3.1%.
The Dow and S&P 500 also closed at records on Thursday as tech shares rallied and President Joe Biden signed his coronavirus relief bill a day earlier than expected. Stimulus checks of $1,400 for millions of Americans could begin rolling out as soon as this weekend, according to the White House.
Tech stocks fell, however, after rates on the 10-year Treasury jumped earlier to 1.642%, a one-year high. Rising rates can hit tech names especially hard as they are seen as more vulnerable to inflationary pressures. Apple (AAPL) - Get Apple Inc. Report finished down 0.8% and Alphabet (GOOGL) - Get Alphabet Inc. Report fell 2.4%.
Earlier this week volatility in the bond market appeared to be easing as investors seemed to show less concern that a reopening of the U.S. economy from the coronavirus pandemic would boost inflation. That volatility returned Friday.
“We think the U.S. 10-year yield has further room to go and could reach 1.8%,” said Sebastien Galy, a senior macro strategist at Nordea. “Growth stocks maintain a high sensitivity to rates, which continues to suggest that they are quite overvalued.”
A jump in producer prices in February from a year earlier - the most since October 2018 - also added to the market's concerns about rising inflation.
Biden on Thursday said in his first prime-time address that he would direct states to make all adults eligible for COVID-19 vaccines by May 1. He also set a July 4 goal for the U.S. to begin returning to normal.
“If we all do our part, this country will be vaccinated soon, our economy will be on the mend, our kids will be back in school, and we’ll have proven once again that this country can do anything,” Biden said.
Novavax (NVAX) - Get Novavax Inc. Report finished up 8.1% Friday after a study showed its vaccine candidate was 86.3% effective against the fast-spreading U.K. variant of COVID-19.
The vaccine candidate had 96.4% efficacy against "mild, moderate, and severe disease caused by the original COVID-19 strain,” Novavax said.