U.S. stocks turned higher Friday as investors absorbed Federal Reserve Chair Kevin Warsh’s first Jackson Hole address, with the S&P 500 and Nasdaq Composite gaining about 0.4% by late morning while the Dow Jones Industrial Average also advanced.
The move came despite a sharp rise in short-term Treasury yields after Warsh said the Fed still had “work to do” if inflation fails to move clearly and quickly toward its 2% target. Markets raised the probability of a September rate increase to roughly 50%, from about 35% before the speech.
S&P 500 and Dow Jones Hold Firm After Warsh Speech
Warsh stopped short of signaling an imminent rate increase, but his remarks reinforced the Fed’s inflation-fighting stance. The two-year Treasury yield climbed 9.5 basis points to 4.325%, its highest level in about a month, while the 10-year yield rose 2.8 basis points to 4.70%.
Stocks initially traded close to flat. At 10:07 a.m. ET, the Dow was up 0.07% at 53,606.27, the S&P 500 was down 0.07% at 7,725.81 and the Nasdaq was off 0.22% at 26,483.33. The S&P 500 and Nasdaq later recovered to gains of about 0.4%, showing that investors were willing to look past the more hawkish rate outlook.
Dow Jones Chart Keeps the Larger Uptrend Intact
The supplied Dow chart adds a technical perspective to Friday’s rebound. It shows the blue-chip index holding above its rising 10-week moving average after pulling back from the recent high, while the 30-week and 50-week averages remain well below the market.
Dow Jones Weekly Uptrend Above WMA10. Source: Andy Stop Loss (@AndyStopLoss1) on X
The chart places the 10-week weighted moving average near 53,169, with the Dow trading above that level when the image was captured. That keeps the broader weekly structure constructive. The recent high around 54,744 is the clearest resistance area; a sustained break above it would strengthen the bullish trend.
On the downside, a weekly close below the 10-week average would weaken near-term momentum and shift attention toward the 30-week average near 51,402. The 50-week average around 50,352 represents a deeper support zone. The chart therefore supports a bullish longer-term trend, but it also shows the Dow approaching an area where buyers still need to prove they can push through prior highs.
Stocks’ 10-Year Lead Over Treasuries Reaches an Extreme
A second chart highlights a much broader market theme: the unusually large performance gap between U.S. stocks and government bonds.
S&P 500 Versus Treasuries 10-Year Return Spread. Source: Topdown Charts, LSEG and Robert J. Shiller data
The chart shows the rolling 10-year inflation-adjusted total-return spread between the S&P 500 and Treasuries near 15 percentage points, far above the long-term average of roughly 5 percentage points. The Kobeissi Letter said the gap is the widest since the late 1950s and that Treasuries produced an average annual real return of about negative 3% over the period, compared with roughly 12% for the S&P 500.
Those figures should be viewed as the interpretation of the supplied historical dataset rather than a forecast. Still, the chart illustrates how strongly equities have dominated bonds over the past decade. It also raises a valuation question: an unusually wide historical spread can reflect powerful equity momentum, but it does not guarantee that the same relative performance will persist.
Nvidia Cools as Broader Market Takes the Lead
Technology stocks were more subdued after Thursday’s AI-driven surge. Nvidia fell about 1.3% in early trading after its previous-session rally, while Marvell Technology dropped roughly 7.2% as investors questioned the timing of revenue from its AI-chip agreement with Google. PayPal slid 11.5%, while Gap jumped about 15% after raising its annual profit outlook.
The market’s next test is whether rising short-term yields begin to pressure equity valuations. For now, Friday’s recovery suggests investors are balancing the prospect of higher Fed rates against resilient earnings, strong long-term equity momentum and a Dow Jones trend that remains technically intact.
