Lower oil and an AI deal support equities as elevated Treasury yields keep pressure on valuations.
MARKET INSIDER — U.S. stocks edged higher on Friday, September 25, as falling oil prices and fresh enthusiasm for artificial-intelligence infrastructure helped offset pressure from Treasury yields near their highest levels in more than two decades.
The S&P 500 and Nasdaq Composite each gained approximately 0.3%, while the Dow Jones Industrial Average advanced 216 points, or 0.4%, in the reported intraday snapshot.
Despite the rebound, the Dow remained on course for a fourth consecutive weekly loss. The divergence highlights a market still finding support in technology while confronting higher financing costs, uncertainty over Middle East supplies and the possibility of another Federal Reserve rate increase.
Key Highlights
- The Dow remained down approximately 0.1% for the week, while the S&P 500 and Nasdaq were tracking gains of about 1% and nearly 2%.
- Akamai rose following its Anthropic agreement, while hopes for renewed U.S.-Iran negotiations helped push oil lower.
- The 10-year Treasury yield stood near 5.188%, with markets pricing roughly a 66% probability of an October Fed hike.
Friday’s rebound leaves weekly performance divided
The session’s gains offered some relief after a volatile week, but the major indexes were heading toward different weekly outcomes.
The Nasdaq’s stronger performance suggests investors remained willing to back technology earnings and AI investment despite rising bond yields. The Dow’s modest weekly decline showed that the recovery was uneven.
The comparison requires care. The Dow is a price-weighted index of 30 companies, while the S&P 500 and Nasdaq Composite use market-capitalization weighting. Their different constituents and construction mean the gap cannot be explained by interest-rate sensitivity alone.
All weekly returns remained provisional ahead of Friday’s closing bell.
Akamai’s Anthropic agreement supports AI sentiment
Akamai Technologies gained about 5% in the supplied market snapshot after announcing a multiyear agreement with Anthropic.
The company disclosed approximately $11.6 billion in contractual commitments. Its regulatory filing specifies that payments depend on conditions including delivery and service availability, and that termination provisions apply. The headline amount therefore represents commitments over time, rather than revenue recognized immediately.
The deal offers a concrete example of AI-related demand extending into cloud infrastructure providers beyond the largest technology companies.
For investors, the next question is how that demand translates into earnings and cash flow. Infrastructure contracts can require substantial investment before the associated revenue is fully realized, making delivery costs, financing and margins important alongside the contract’s headline value.
Lower oil provides relief as diplomacy resumes
West Texas Intermediate crude futures fell approximately 2% to around $92 a barrel, while Brent declined about 1% to roughly $104.
The move followed Iran’s proposal to reopen the Strait of Hormuz and restart nuclear talks within seven days if Washington accepts its conditions. Reuters also reported that U.S. and Iranian negotiators were considering a phased agreement to end the conflict.
The proposal remains conditional. It does not establish an agreed reopening date or guarantee a prompt recovery in commercial shipping.
Nevertheless, the possibility of improved energy flows offers markets a potential source of relief. Sustained declines in oil prices could ease business costs and reduce some inflation pressure.
That benefit would depend on implementation. Shipowners, insurers and buyers would need confidence that cargoes could move reliably before a diplomatic understanding translated into normal trading conditions.
Bond yields remain the central constraint
The Treasury market continued to present a less supportive picture.
The 10-year yield was last quoted near 5.188%, after reaching its highest level since 2007 on Thursday. The 30-year yield stood around 5.49%, following its highest reading since 2004.
Hawkish remarks from Fed Governor Michael Barr, elevated energy prices and a strong business-activity survey contributed to the week’s increase in yields.
The September purchasing managers’ report showed U.S. business activity accelerating to a more than five-year high, strengthening expectations of further monetary tightening.
In Friday’s source snapshot, CME FedWatch pricing indicated approximately a 66% chance of an October rate increase. That figure reflects market-implied expectations and can change rapidly with economic releases or policy comments.
Higher Treasury yields affect equities through both financing costs and valuation. They can raise borrowing expenses and increase the return investors demand from stocks relative to government bonds.
Strong earnings can offset those pressures for a time. The risk increases if higher yields coincide with weaker profit expectations.
Resilience does not remove valuation risk
Eric Diton, president of The Wealth Alliance, said investor sentiment had weakened as yields rose, even while the S&P 500 and Nasdaq remained approximately 1% below their recent highs.
He described the market as resilient but cautioned that a continued increase in rates could eventually exert greater pressure on performance.
The distinction is useful: near-record indexes demonstrate that buyers are still active, but they do not establish that higher borrowing costs have stopped mattering.
A broader advance supported by improving earnings across sectors would provide stronger evidence of durability than gains concentrated in a limited group of technology stocks.
Trade details become the next test
Investors were also watching President Xi Jinping’s U.S. visit for clarity on the direction of bilateral trade policy.
U.S. Trade Representative Jamieson Greer told CNBC that further details from the negotiations would be released on Monday, September 28. Treasury Secretary Scott Bessent had said the countries agreed to extend their trade truce by two months.
For Asian manufacturers and global companies, an extension could reduce immediate uncertainty over market access and supply-chain planning. The practical effect will depend on the detailed terms and their implementation.
The next phase of trading will therefore hinge on three developments: whether oil’s decline persists, whether Treasury yields stabilize and whether diplomatic announcements produce tangible changes in trade and shipping. Friday’s gains offered relief, while leaving those larger questions open.
