U.S. stocks closed higher on Friday, with all three major indexes posting gains as a fresh wave of artificial intelligence dealmaking helped investors look past a bond market that continues to send borrowing costs to multi-year highs. The advance capped a positive week for Wall Street even as the 10-year Treasury yield hovered near its highest levels since the mid-2000s, a reminder that higher-for-longer interest rates remain the market’s biggest overhang heading into the fall.
What Moved Markets
The Dow Jones Industrial Average closed at 51,819.79, up 469.81 points, or 0.91%. The S&P 500 gained 39.28 points, or 0.51%, to finish at 7,743.41. The Nasdaq Composite added 129.34 points, or 0.48%, ending the session at 27,068.72.
The rally came despite continued pressure from the bond market, where the 10-year Treasury yield has climbed to roughly 5.2%, its highest sustained level in nearly two decades, as investors weigh persistent inflation and heavy government debt issuance. Higher yields typically raise borrowing costs and weigh on stock valuations, but traders have kept buying AI-linked names on the view that earnings growth from that spending outweighs the higher cost of capital.
Oil prices stayed elevated and choppy on reports of both easing and escalating tension in the Middle East, including talk of U.S.-Iran discussions over the Strait of Hormuz alongside separate reports of supply disruptions tied to Saudi Arabia. That volatility kept energy costs in focus for transportation and airline stocks. Markets also found some reassurance from the conclusion of Chinese President Xi Jinping’s visit to Washington, where trade discussions with President Trump wrapped up without new escalation, even though few concrete details emerged. Separately, consumer sentiment data released this week showed the University of Michigan’s index slipping to a four-month low, with shoppers citing high gas prices and tariffs.
Notable Movers
Akamai Technologies (AKAM) was one of the day’s biggest gainers, with shares surging as much as 15% after the company announced an $11.6 billion, seven-year cloud services agreement with AI company Anthropic, one of the largest infrastructure commitments of its kind this year.
Qualcomm (QCOM) rose about 3% after the chipmaker renewed its global patent licensing agreement with Apple, a deal that locks in long-term cash flow from its high-margin licensing business and highlights Qualcomm’s push into edge AI and data-center technology beyond its core smartphone business.
Costco Wholesale (COST) shares were little changed after the retailer topped Wall Street’s fiscal fourth-quarter estimates, posting earnings of $6.75 per share versus the $6.53 analysts expected. Investors appeared to treat the beat as already priced in after a strong run heading into the report.
Meta Platforms (META) capped a strong week, with shares up roughly 16% since Monday after the company unveiled new AI agent products that impressed investors and renewed optimism about how the company plans to monetize its AI investments.
Looking Ahead
Investors head into next week still focused on the bond market, where the trajectory of long-term yields will likely continue to set the tone for how much further AI-driven gains in stocks can run. Any fresh commentary from Federal Reserve officials on the path of interest rates, along with incoming inflation and labor market data, will be closely watched for clues on whether borrowing costs stabilize or keep climbing. Energy markets also bear watching given the ongoing uncertainty around Middle Eastern supply routes, while more corporate earnings and additional AI infrastructure announcements could continue to drive individual stock moves even if the broader market’s direction stays tied to interest rates.