Wall Street closed higher on Friday as technology stocks led a broad rebound and crude oil prices slid on reports that Iran presented a de-escalation plan to the United States. The S&P 500 rose 0.51% to 7,743.41, the Nasdaq gained 0.48% to 27,068.72, and the Dow Jones Industrial Average added 0.93% to 51,828.62, capping a volatile week shaped by war-driven energy prices and a surge in US Treasury yields.
West Texas Intermediate crude for November delivery fell 2.33% to $92.41 per barrel, while November Brent declined 2.14% to $104.32. The drop followed reports that Iran handed Washington a proposal aimed at easing the eight-month conflict that has kept the Strait of Hormuz partially closed. Cassim Brooks, research director at XTB, said a potential reopening of the strait would likely reduce raw material price pressures, though he warned it would not entirely eliminate inflation concerns given the links between crude and refined fuel costs.
Energy analysts estimate the fear premium had added $15 to $20 per barrel to crude prices before the latest diplomatic signals. Tanker Trackers reported Wednesday that crude exiting the US blockade line reached 13 million barrels per day, double the volume of less than a month earlier, helped by Saudi Arabia shifting shipments back through the Persian Gulf and US military escorts for daytime transits through the strait.
Tech leads, but not uniformly
The technology sector advanced 0.99% to lead all 11 market sectors, fueled by upwardly revised earnings forecasts for major artificial intelligence companies and large corporate cloud agreements. Akamai Technologies rose 3.20% after securing a seven-year cloud infrastructure contract with Anthropic valued at up to $20 billion. Microsoft climbed 3.66% following a new Copilot release, Dell gained 5.01%, and Qualcomm added 3.39%.
Not every tech giant joined the rally. Intel fell 3.45%, and Meta dropped 3.33% despite a 13% gain earlier in the week after the September 23 launch of its Muse Charm wearable device.
Bond market keeps the pressure on
The bond market remains the stubborn counterweight. During the Friday session, the 10-year US Treasury yield reached a 19-year high near 5.22% before settling at 5.16%, and the 30-year yield hit 5.519%, its highest since June 2004. The CME FedWatch tool showed a 66% probability of a Federal Reserve rate increase at the next policy meeting, up from roughly 50% earlier in the week, after a strong US PMI reading of 58.4, the highest in more than five years.
Matt Maley, chief market strategist at Miller Tabak, noted that lower oil prices allowed stocks to overlook the climb in bond yields, but cautioned that a sustained 10-year yield above 5% entering October would create significant headwinds for equities. The Fed delivered its first rate hike in over three years on September 17, lifting the target range to 3.75% to 4.00%, and the updated dot plot signaled further tightening if energy-driven inflation persists.
| Index | Close | Change |
|---|---|---|
| S&P 500 | 7,743.41 | +0.51% |
| Nasdaq | 27,068.72 | +0.48% |
| Dow Jones | 51,828.62 | +0.93% |
| WTI crude (Nov) | $92.41 | -2.33% |
| Brent crude (Nov) | $104.32 | -2.14% |
The week in context
The rally ended four sessions of losses for US indices. Oil had surged 9.7% over the week before the Friday retreat, driven by strikes between the US and Iran in the Persian Gulf and attacks on Saudi oil infrastructure by Iran-backed fighters. Saudi Arabia shut its East-West crude pipeline as a precaution, and Iran-backed Houthis reportedly advanced toward Perim Island off Yemen, keeping supply fears alive even as diplomacy picked up.
Iranian state media said Tehran would meet Gulf states in Oman to discuss the Strait of Hormuz, with Gulf Cooperation Council diplomats expected to meet their Iranian counterpart on Monday to discuss a possible temporary arrangement for managing shipping through the strait. Traders will watch that meeting closely: a functioning arrangement would remove much of the remaining fear premium, while a breakdown would send crude back toward its recent highs.
Meanwhile the inflation picture keeps the Fed in a tightening mood. Headline inflation ran at 3.4% in August, and the OECD said this week that the energy shock is becoming more entrenched, weighing on the outlook for 2027 even as AI-led investment holds up global growth. The OECD raised its 2026 global growth forecast to 2.9% but warned growth could slow to as little as 2.3% next year if oil stays elevated and food costs rise. Central banks have responded faster than in the post-pandemic inflation surge, the OECD chief economist said, which has limited second-round effects so far.
For crypto and other risk assets, the same math applies. Bitcoin held near $84,000 on Friday as traders weighed strong ETF inflows against the rising yield environment, a dynamic that has defined the market since the Fed pivot. The October FOMC meeting is now the key date on the calendar, with a 66% implied probability of another 25-basis-point hike.
What to watch next week
The calendar is crowded. The Fed meets Wednesday with markets expecting a hike, the UK and Japan also announce policy decisions, and the US releases retail sales, trade terms and industrial production data. The outcome of the Gulf-Iran talks in Oman could reshape the oil curve in either direction within hours. For equity investors, the question is whether the AI earnings upgrades that powered the Friday rally can offset a funding environment that keeps getting more expensive.