S&P500 Forecast: Rising Yields and Nvidia Selloff Pressure US Indices

Stocks Sell Off as Yields Hit Multi-Year Highs and Nvidia Pulls Back

The S&P 500 Index dropped 1% shortly after Friday’s opening bell. The Nasdaq Composite lost 1.4%. The Dow fell 329 points or 0.66%. All three closed at record highs Thursday. Friday told a different story.

The 30-year Treasury yield hit 5.117%, its highest level since May 2025. The 10-Year U.S. Treasury yield surged to 4.573%. Nvidia fell 4%. The AI trade that has been carrying this market for weeks finally ran into a wall it could not ignore.

Yields Hit Levels the Market Cannot Ignore

5.117% on the 30-year. 4.573% on the 10-Year U.S. Treasury yield. 4.075% on the 2-Year. Every point on the curve moved higher Friday and the equity market absorbed the full impact of a week that delivered three consecutive hot inflation prints. I’ve watched yield moves pressure stocks before but this one had a different quality. The bond market was not reacting to one surprise. It was repricing the entire Fed outlook after CPI, PPI and import prices all came in above expectations in the same week. When that happens the move is not one session. It is a repositioning and Friday was the first day the equity market admitted it.

Technology stocks feel yield moves from both ends. Borrowing costs rise across the economy and the discount rate applied to future earnings goes up at the same time. High growth names that trade on expectations years out are the most exposed. When the 30-year yield clears 5% the math on those valuations gets harder and some investors stop doing the math entirely and just sell.

Nvidia’s Positioning Became the Problem

Nvidia fell 4% Friday. The stock had gained 20% since May 5 and the market cap had climbed near $5.7 trillion. Roughly $40 billion in options delta was tied to contracts expiring today and that concentration of bullish positioning was the vulnerability.

A stock that runs that fast into an earnings catalyst next week attracts leveraged bets that have to go somewhere when the move stalls. Friday the move stalled. The options unwind hit Nvidia first and the semiconductor sector absorbed the rest of it.

Advanced Micro Devices and Micron Technology each dropped around 5%. Intel fell 6%. The Philadelphia Semiconductor Index took the hardest hit of any sector on the session. The AI trade is not over but it ran too far too fast into a yield environment that was already turning against it.

Beijing Delivered Less Than Expected

Trump and Xi wrapped up their summit Friday without the major policy agreements Wall Street had been pricing in. Boeing dropped another 2% after Trump announced China would purchase 200 Boeing aircraft. That number landed only modestly above prior expectations and the market reacted accordingly.

Investors had positioned for something bigger out of Beijing and when it did not come the disappointment compounded everything else that was already hitting stocks. A trade progress announcement that stops well short of a genuine reset does not move markets higher. It just removes a reason to buy and Friday had enough reasons to sell already.

Oil Is Still Feeding the Inflation Story

June WTI crude oil rose 3% to roughly $104 a barrel Friday. Spot Brent crude climbed 2% to around $108. Trump said his patience with Tehran is running out after the Beijing meetings and the oil market repriced that warning immediately. Three hot inflation prints this week were all driven in part by energy costs and oil moving higher going into the weekend means next week’s inflation picture does not improve on its own. The Fed has no room to move and rising oil is the reason.

Technical Outlook

The S&P 500 Index is lower on Friday. The early selling pressure gapped yesterday’s low, turning 7,517.12 into a new minor top. A trade through this level will signal a resumption of the uptrend.

The minor range is 7,338.54 to 7,517.12. Its 50% level is 7,417.83. Currently, the index is trading on the weak side of this pivot. This opens the door to another pivot at 7,345.62.

The next layer of support is another minor bottom at 7,338.54. Taking out this level will change the minor trend to down and shift momentum to the downside. This will then lead to a test of another pair of pivots at 7,312.49 and 7,381.84.

The latter is a potential trigger point for an acceleration to the downside with 7,174.12 to 7,153.57 the next major target zone.

Despite expectations for further weakness, minor pivots and minor bottoms will only be exposed. The nearest main bottom is 6,316.91. With this intact, traders should still be in buy the dip mode, setting up the possibility of a new higher main bottom and test of the record high at 7,517.12.

At this point, the bulls will be looking to extend the rally through 7,517.12. The bears will try to form a secondary lower top. If successful, this will form an M top pattern, setting up the possibility of an even bigger break later in the month. This type of top could take 4 to 5 days to develop.

If the selling pressure increases throughout the session today, we could see a test of last week’s close at 7,398.92 into the close. A close below this price will send a bearish signal ahead of the weekend.

What to Watch

Three things hit this market at the same time Friday and none of them are resolved going into the weekend. Yields are at multi-year highs with the 30-year above 5.1% and the 10-Year U.S. Treasury yield at 4.573%. Oil pushed back above $104 after Trump said his patience with Tehran is running out.

The Beijing summit ended without the trade breakthrough Wall Street was pricing in. That combination of rising borrowing costs, persistent inflation and diplomatic disappointment is exactly the setup that produces follow-through selling on Monday.

The S&P 500 formed a new minor top shortly after the opening on Friday. This puts several key pivots on the radar. This also opens the door to the formation of a potentially bearish M top pattern over the next 4 to 5 trading sessions. Furthermore, a close below last Friday’s close at 7,398.92, opens the door to further weakness on Monday.

More Information in our Economic Calendar.