Futures linked to the S&P 500 rose 0.3%, while Dow Jones Industrial Average futures gained 0.2%. Nasdaq 100 futures were up 0.5%.
The gains came after the benchmark 10-year US Treasury yield climbed above 5.20% on Thursday, its highest level since 2007. It later eased to around 5.18% on Friday. The yield has risen about 40 basis points since September, increasing borrowing costs for businesses and consumers.
Higher bond yields have become a growing concern for stock investors because they raise the cost of borrowing and make relatively safe government bonds more attractive compared with equities. The recent rise has also reflected concerns about persistent inflation, higher energy prices and the growing US government debt burden.
ING Bank analysts said elevated energy prices and inflationary pressures could keep upward pressure on the 10-year Treasury yield.
Oil prices retreat as markets watch Hormuz
A pullback in crude prices provided another lift to market sentiment on Friday as investors watched developments around the Strait of Hormuz, a critical route for global oil shipments.
Brent crude fell 1.4% to $98.83 a barrel, while US crude declined 1.7% to $92.97. Oil remains well above the roughly $72-a-barrel level seen in late February before the start of the war.
Investors have been closely watching reports of possible steps towards reopening the Strait of Hormuz. The waterway has become a key focus for markets because prolonged disruption could keep energy prices elevated and add to inflation pressures.
The rise in oil prices has also added to concerns that central banks could face renewed inflationary pressure, making it harder for them to ease monetary policy.
Dow heads for fourth weekly decline
Despite Friday’s gains in futures, the Dow Jones Industrial Average is down 0.6% so far this week and is on course for its fourth consecutive weekly decline.
European markets were mixed. Britain’s FTSE 100 rose 0.3%, while France’s CAC 40 slipped 0.1% and Germany’s DAX gained 0.6%.
Some Asian markets were also mixed, while exchanges in mainland China, Taiwan and South Korea were closed for a holiday.
Trump-Xi meeting in focus
Investors are also watching the meeting in Washington between US President Donald Trump and Chinese President Xi Jinping.
The two leaders discussed areas including trade, artificial intelligence and the Middle East, although analysts said there had been limited concrete progress so far.
In currency markets, the US dollar weakened to 157.77 yen from 158.86 yen, while the euro rose to $1.1402 from $1.1380.
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