US Stocks Rally as Tech Lags Amid High Treasury Yields

US equity indexes closed higher this week, with broad market gains outweighing declines in the technology sector despite elevated long-end Treasury yields. The S&P 500 finished at 7,811.54 on Friday, up from 7,722.72 the previous week. The Nasdaq Composite ended near 27,366.17, compared with 27,190.86 a week earlier, while the Dow Jones Industrial Average settled at 51,654.95 from 51,176.96.

Sector performance was mixed, with all categories rising except technology and industrials. Consumer defensive, utilities, and energy stocks led the weekly gains. This broad-based movement occurred while long-end government borrowing costs remained near their highest levels since 2002.

Treasury auction results reflected these elevated rates. The US Treasury sold $39 billion in 10-year notes at a high yield of 5.30%, an increase from approximately 4.83% in the prior auction. Demand for these notes strengthened, with the bid-to-cover ratio climbing to 2.77 from 2.71. Conversely, the $22 billion auction of 30-year bonds saw a high yield of 5.618%, up from 5.308% previously. Interest in the longer-term debt was softer, as the bid-to-cover ratio fell to 2.54 from 2.61.

Monetary policy developments also influenced market sentiment. A note from Stifel described the Federal Open Market Committee's September meeting minutes as showing a "modestly hawkish" panel that unanimously supported the first interest-rate increase in three years. The minutes indicated broad support for a potential second rate hike by year-end, driven by a resilient economic backdrop.

Geopolitical factors provided additional context for the week's trading. President Donald Trump stated that the US will not attack Iran before mid-term elections, citing "productive discussions" with Tehran. In related developments, Saudi Arabia-backed Yemeni forces recaptured coastal areas around the Bab el-Mandeb Strait, displacing Iran-aligned Houthis from most territories they had seized in the previous month.