U.S. stocks ended the week mixed, with the S&P 500 rising 0.12% to 7647.19 points and the Nasdaq Composite gaining 0.35% to 26511.01 points, while the Dow Jones Industrial Average fell 0.22% to 51663.30 points, as the yield on the 10-year U.S. Treasury note topped 5% and oil remained above $100 a barrel.
The week ended after volatile sessions marked by investors awaiting the Federal Reserve's decision on raising interest rates and assessing the implications of its monetary policy path for stocks, bonds and the U.S. economy. Gains in semiconductor stocks helped the market avoid a deeper sell-off.
Chuck Carlson, chief executive of Horizon Investment Services, said investors were trying to absorb the short- and long-term implications of the Federal Reserve's policy path and its potential impact on stocks and fixed-income investments, while remaining cautious about building large positions ahead of the weekend.
Oil adds to inflationary pressure
Oil remained above $100 a barrel but retreated from its session high after China, at Saudi Arabia's request, asked Iran to curb Houthi attacks on Saudi oil infrastructure.
The sharp rise in oil prices pushed diesel prices to record levels, raising farming and shipping costs and threatening to spread the pressure to broader sectors of the economy as inflation concerns persisted.
Markets raise interest-rate bets
The developments coincided with major central banks moving to tighten monetary policy to combat inflation linked to the fallout from the war with Iran. The Bank of Japan raised interest rates to their highest level in 31 years, following similar moves by the Federal Reserve and the European Central Bank, while the Bank of England left rates unchanged but warned that it could raise them in the future.
Markets are pricing in a probability of more than 50% that the Federal Reserve will raise interest rates again at its October meeting, up from 42.5% a week ago and 7.2% a month ago, according to CME Group's FedWatch tool.
Company and cryptocurrency moves
Berkshire Hathaway announced that Warren Buffett would step down as chairman of the board to become honorary chairman, nine months after handing the chief executive role to Greg Abel.
Shares of Xenon Pharmaceuticals fell after the temporary suspension of enrollment of new patients in clinical trials for an experimental drug targeting major depressive disorder and bipolar disorder, following reports of side effects.
By contrast, shares of cryptocurrency-related companies, including Coinbase, Strategy and Robinhood, rose as Bitcoin prices climbed. The expiration of quarterly derivatives contracts linked to stocks, index options and futures also added to market volatility near the end of the session.
