A reprieve from rising oil prices helps US stocks finish the week higher

NEW YORK (AP) — A cooldown in oil prices on Friday helped release some of the pressure that’s built up on Wall Street, and U.S. stocks closed out their first winning week in the last three.

The S&P 500 added 0.5% to break a three-day losing streak marked by big swings due to rising yields in the bond market. Despite the week’s uneasiness, the main measure of the U.S. stock market’s health pulled back within 0.7% of its all-time high set last month.

The Dow Jones Industrial Average added 478 points, or 0.9%, and the Nasdaq composite climbed 0.5%.

Stocks got a boost after the price for a barrel of Brent oil dropped 2.8% to $97.44 per barrel. It’s been yo-yoing on uncertainty about when the war with Iran will allow oil to flow freely again from the Middle East. Prices go down when hopes rise for a possible deal to fully reopen the Strait of Hormuz to oil tankers, and they go up when doubts resurface.

But trading was shaky again on Wall Street Friday, particularly after a report on U.S. consumer sentiment sent Treasury yields higher in the morning.

The report from the University of Michigan said U.S. consumers are bracing for inflation of 4.6% in the coming year, up from their forecast of 4% the month before. It also said that overall sentiment among consumers was not as bad as economists expected, even if it was the lowest in four months.

The rising expectations for high inflation are potentially dangerous for the economy because they could encourage behavior that leads to a vicious cycle that makes the cost of living spiral even higher.

Some consumers told the survey that buying some kinds of products now would help them avoid higher prices in the future. If many rush to make such purchases at the same time, it could encourage sellers to raise prices further.

Following the report on consumer sentiment, the yield on the 10-year Treasury briefly jumped to 5.22%, up from 5.18% late Thursday, and was near its highest level since 2007.

High yields slow the economy by making it more expensive for everyone to borrow money, while undercutting prices for stocks and other investments. The 10-year yield has been jumping since the start of the war with Iran, when it was at 3.97%.

Higher yields worldwide are rattling all kinds of financial markets. They’re on the rise because of worries about inflation, expensive oil, big government debt loads, signs of continued economic strength and other factors.