Stocks Rebound After Sell-Off Driven By Rising Yields But End The Week In The Red
Stocks climbed on Friday, recovering from a sell-off driven by higher Treasury yields. However, major indexes ended the week in the red.
Both the S&P 500 and the tech-heavy Nasdaq Composite climbed 0.43%. The Dow Jones Industrial Average overperformed, gaining 0.98%.
Bitcoin was the asset that overperformed this week, jumping more than 20%. The rally began on Wednesday after the U.S. Treasury announced increased buybacks of government debt, which triggered a brief rally of riskier assets. Even though most quickly fell after, the largest cryptocurrency kept climbing.
Citing data from CoinGlass, the outlet added that the rally continued by a large short squeeze where $2.7 billion in short positions were liquidated. Bitcoin kept climbing on Thursday after President Donald Trump renewed his push for Congress to pass major crypto legislation.
Trump urged lawmakers to pass the Clarity Act, legislation designed to establish clearer rules for the U.S. digital asset market, while reaffirming his support for the crypto industry.
Rising yields and mounting debt, which hit $40 trillion on Thursday, fueled the drop in stocks earlier this week.
The numbers have moved quickly. Just six months ago, the nonpartisan Congressional Budget Office projected federal borrowing would reach about $39.4 trillion by the end of the fiscal year.
Annual interest payments on the national debt are projected to exceed $1 trillion this year, according to the CBO, putting them roughly on par with the size of the Pentagon’s budget.
Interest expenses already consume about 19% of federal revenue, according to the Peter G. Peterson Foundation. That share is projected to rise to 26% by 2036 if current trends continue. The faster pace of borrowing is also bringing Washington closer to another politically explosive debt ceiling fight. Congress raised the legal borrowing limit to $41.1 trillion last year.
Preliminary projections from the Bipartisan Policy Center indicate the government could reach that limit between late winter and midsummer 2027, with the latest borrowing figures pushing expectations toward the earlier part of that range.
