Stocks rise with tech boost, yen weakens after Japan rate hike

Wall Street

MSCI's global equities gauge advanced on Friday with technology leading Wall Street higher, while the yen weakened after the Bank of Japan raised interest rates to a three-decade high, as widely expected, and left the door open to more tightening.

Oil prices rose as traders weighed the potential impact of a supply disruption from Venezuela. U.S. President Donald Trump told NBC News in an interview published on Friday he was leaving the possibility of war with the country on the table.

Investors sold the yen once the BOJ delivered its highly anticipated rate hike, driving some profit-taking and taking the currency to levels where traders say officials may consider intervention to support it. Japan's 10-year government bond yield hit a 26-year peak and the Nikkei closed up 1%.

In U.S. equities, technology shares were back in fashion as investors were encouraged by a strong financial outlook from Micron Technology on Wednesday, according to Michael James, equity sales trader, Rosenblatt Securities. Rosenblatt raised its Micron price target to $500 from $300 after the results.

"The return to a more optimistic tone around the AI trade is certainly helping a number of things across the board. It was certainly helping the Nasdaq in a meaningful way yesterday and again today," said James.

"We're not out of the woods, but it certainly feels a lot better today than it did most of the course of the last week," he added.

On Wall Street the Dow Jones Industrial Average rose 183.04 points, or 0.38%, to 48,134.89, the S&P 500 rose 59.74 points, or 0.88%, to 6,834.50 and the Nasdaq Composite rose 301.26 points, or 1.31%, to 23,307.62.

MSCI's gauge of stocks across the globe rose 7.14 points, or 0.71%, to 1,008.32 on the day but for the week it was showing a slight decline.

Earlier, the pan-European STOXX 600 index finished up 0.37% for a record closing high. It added 1.6% for the week for its strongest gain since the week beginning November 24.

On the U.S. data front, existing home sales rose marginally in November as economic uncertainty and still-elevated mortgage rates curbed demand. University of Michigan's survey of consumer sentiment came in lower than consensus estimates but above the November number.

"The economy may be moving out of what appears to have been a mild soft patch in economic growth," said Gary Schlossberg, global strategist at Wells Fargo Investment Institute, referring to Friday's data and Thursday's consumer price inflation of 2.7% even as he cautioned that CPI may have been distorted by the 43-day government shutdown.

"We could still be feeding off the CPI news yesterday. It's an important event at face value. We're a little skeptical just how much of an improvement in inflation we saw," said Schlossberg, but he added that "it looks like inflation may have peaked, at least for now. That has to be good news for the Fed and by extension markets."

In currencies, the yen weakened sharply against the dollar and other major currencies as traders drove it towards levels that could trigger official buying, after the Bank of Japan raised rates to a 30-year high.

Against the Japanese yen , the dollar strengthened 1.38% to 157.69.

The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.27% to 98.70. The euro fell 0.08% to $1.1711.

In fixed income markets, U.S. Treasury yields rose in line with global bond yields on Friday after the Bank of Japan raised interest rates, while investors continued to evaluate delayed economic releases and the direction of Fed policy.

The yield on benchmark U.S. 10-year notes rose 3.3 basis points to 4.149%, from 4.116% late on Thursday while the 30-year bond yield rose 2.7 basis points to 4.8272%.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.6 basis points to 3.486%, from 3.46% late on Thursday.

In energy markets, oil prices settled higher on the prospect of supply disruptions from a U.S. blockade of Venezuelan tankers, while the market waited for a Russia-Ukraine peace deal and interest rate decisions from central banks around the world.

U.S. crude settled up 0.91%, or 51 cents, at $56.66 a barrel and Brent settled at $60.47 per barrel, up 1.09%, or 65 cents, on the day.

In precious metals, silver soared to a record high, bolstered by investment demand and supply tightness, while gold eyed a weekly gain, buoyed by bets on Federal Reserve interest rate cuts.

Spot silver rose 2.8% to $67.22 an ounce. Spot gold rose 0.16% to $4,339.03 an ounce. U.S. gold futures rose 0.33% to $4,354.00 an ounce.