Bonds Hold The Key: Wall Street Feels Calmer After Harrowing Thursday, With Yields Stepping Back

Bonds Hold The Key: Wall Street Feels Calmer After Harrowing Thursday, With Yields Stepping Back

After yesterday's heart-wrenching finish, the question is whether things can recover a bit before the weekend. It looks like the bleeding has slowed, but a lot depends on what happens in the bond market. All eyes remain on the 10-year Treasury yield, which rose as high as 1. 6% yesterday after starting the year near 0. 9%. The rapid rise fueled concerns about possible inflation and economic overheating. Also, the 10-year yield is now roughly equal to the S&P 500 dividend yield, meaning Treasuries could pose more competition to stocks. The yield ticked down a little to 1. 47% early Friday, way below yesterday's peak but still much higher than a week ago when it was under 1. 3%. The slip in yields may weigh on the Financial sector today, but we'll see if Tech can come back. The Nasdaq NDAQ (COMP), which is heavily weighted toward Tech, dropped 3. 5% yesterday. It's Friday, which might feel like a relief after the week we've had but also could clarify where things stand on Wall Street. During the first wave of the pandemic, when fear stalked the markets, you often saw big drops on Friday because people were worried about holding