U.S. stocks’ recent rebound appeared to sputter on Friday morning, as major indexes opened around break-even. Elsewhere, bond yields continued to climb and cryptocurrencies sold off.
Shortly after Friday’s open, the Dow Jones Industrial Average was up 45 points, or 0.1%, one day after the benchmark rallied 506 points Thursday. The S&P 500 added 0.1% and the Nasdaq Composite declined 0.4%.
U.S. indexes have taken a more-than-3% round trip this week, after a Monday-Tuesday selloff as investors grappled with uncertainty about China Evergrande Group, Federal Reserve policy, and more.
There have been plenty of big moves in the bond market as well. The yield on 10-year U.S. Treasury climbed to 1.43% Thursday—its highest since July, but still well off the 1.75% peak from March 2021. The yield ticked up further to around 1.44% on Friday.
“The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred,” said Jim Reid, a strategist at Deutsche Bank.
“A hawkish Fed meeting, with the dots increasing and the end of quantitative easing potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes,” Reid added.
China captured attention once again on Friday, and not just for the drama at China Evergrande. The country’s regulators released a statement saying that cryptocurrency transactions are illegal and should be banned.
“China ruling crypto transactions illegal would be disastrous for the cryptocurrency sector,” writes George Monaghan, an analyst at GlobalData. “Being excluded from the world’s largest market is terrible for any product, and this is the strongest demonstration yet of China’s anti-crypto sentiment.”
The price of Bitcoin dropped close to 6%, to around $41,500. Ethereum and Litecoin each sold off about 9%.
Fears surrounding the potential failure of Evergrande—the world’s most indebted property developer—also refuse to go away. China Evergrande (3333.H.K.) stock dropped 11.6% in Hong Kong as reports said that the company had failed to make an $83 million interest payment on an offshore bond denominated in dollars. Markets have largely pushed aside Evergrande concerns from earlier in the week, as contagion risk appears to be manageable despite indications that China was preparing for the group’s eventual collapse.
Shares in Evergrande’s electric vehicle venture, Evergrande New Energy Auto (0708.H.K.) dropped 23.4% amid reports that it had fallen behind on payments to workers and suppliers.
Overseas, Tokyo’s Nikkei 225 rose 2.1% as Japanese traders returned from holiday and welcomed upbeat inflation data. Germany’s DAX underperformed in Europe, down 0.6%, as the country heads into a federal election over the weekend that will replace longtime Chancellor Angela Merkel.
Here are seven stocks on the move Friday:
Cloudflare (NET) fell 5.2% after getting cut to Perform from Outperform at Oppenheimer.
Coinbase (COIN) lost 2.2% has after China said all crypto transactions would be illegal.
Micron Technology (MU) declined 0.8% after JPMorgan cut its price target to $100 from $140.
Write to Nicholas Jasinski at email@example.com