Wall Street ends down as yields rise; S&P 500 posts weekly loss

© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 17, 2022. REUTERS/Brendan McDermid/File Photo

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks fell on Friday in a broad selloff led by megacaps as U.S. bond yields rose, with the S&P 500 posting losses for the week after four straight weeks of gains.

The benchmark 10-year U.S. Treasury yield climbed to an almost one-month high near 3%. Megacaps Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) all fell, putting pressure on the S&P 500.

Investors have been weighing how aggressive the Federal Reserve may need to be as it raises interest rates to battle inflation.

Richmond Federal Reserve President Thomas Barkin said on Friday that U.S. central bank officials have "a lot of time still" before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting.

"The rise in rates around the globe and tough talk from central bankers are being used as an excuse to push stocks lower in very light volume on an August Friday session," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

According to preliminary data, the S&P 500 lost 55.14 points, or 1.29%, to end at 4,228.37 points, while the Nasdaq Composite lost 258.35 points, or 1.99%, to 12,707.00. The Dow Jones Industrial Average fell 294.77 points, or 0.86%, to 33,704.50.

Friday's monthly options expiration should also make way for greater near-term stock market moves as options positions expire, said Brent Kochuba, founder of options-focused financial insights company SpotGamma.

The U.S. central bank needs to keep raising borrowing costs to tame decades-high inflation, a string of U.S. central bank officials said on Thursday, even as they debated how fast and how high to lift them.

The Fed has raised its benchmark overnight interest rate by 225 basis points since March to fight inflation at a four decade-high.

Focus next week may be on Fed Chair Jerome Powell's speech on the economic outlook at the annual global central bankers' conference in Jackson Hole, Wyoming.

Meme stock Bed Bath & Beyond Inc (NASDAQ:BBBY) plunged as billionaire investor Ryan Cohen exited the struggling home goods retailer by selling his stake.

Bank shares also fell after recent gains.