International oil prices retreated after signs of easing tensions in the Middle East, helping all three major US stock indexes finish higher on the final trading day of September's last full trading week. Long-term Treasury yields, however, continued to rise as consumer inflation expectations strengthened, leaving markets focused on the potential impact of higher borrowing costs on equity valuations and corporate financing ahead of October.
Iran proposed a seven-day ceasefire that would include reopening the Strait of Hormuz and resuming talks over its nuclear program. The proposal eased concerns about disruptions to energy shipments. Front-month West Texas Intermediate crude futures fell 2.5% to $92.29 a barrel, while Brent crude futures declined 2.8% to $97.43.
Long-Term Treasury Yields Reach 52-Week Highs
The two-year Treasury yield, which is more sensitive to monetary-policy expectations, fell 4.8 basis points to 4.847%. Longer-dated yields moved in the opposite direction: the 10-year yield slipped 0.6 basis points to 5.156%, while the 30-year yield rose 2.3 basis points to 5.485%. Both reached fresh 52-week highs.
The shift in the yield curve suggests that while expectations for near-term interest rates have eased slightly, investors remain cautious about longer-term inflation, government financing and economic-growth risks. Higher long-term rates typically raise borrowing costs for companies and households and can weigh on richly valued growth stocks.
All Three Major Indexes Finish the Week Higher
At the close, the Dow Jones Industrial Average rose 0.9% to 51,828. The index gained 0.3% for the week, ending a three-week losing streak. The S&P 500 added 0.5% to 7,743 and advanced 1.2% for the week. The Nasdaq Composite rose 0.5% to 27,068, bringing its weekly gain to 2.1%.
The stock-market gains reflected lower energy prices and strength in some technology shares. But moves in the bond market showed that the rebound in equities has not removed pressure from interest rates. In assessing fourth-quarter asset performance, investors remain focused on inflation data, Treasury issuance and corporate earnings expectations.
University of Michigan Survey Shows Inflation Concerns Worsening
The University of Michigan's revised consumer sentiment index for September came in at 48.1, down from 51.7 in August but above the previously reported preliminary reading of 47.8. Joanne Hsu, director of the university's Surveys of Consumers, said the reading was the lowest since May and well below the year-earlier level of 55.1.
Respondents' assessments of their current personal finances and their expectations for the year ahead both deteriorated by about 10% from August. High prices remained a leading concern. One-year inflation expectations rose to 4.6% in September from 4.0% in August, the highest level since June.
The September reading was also well above the 3.4% recorded in February before the Iran conflict began and higher than every monthly reading in 2024. Long-term inflation expectations rose to 3.4%, ending a three-month run at 3.3%. The combination of weaker consumer confidence and higher inflation expectations could continue to influence household spending and expectations for the path of interest rates.
Akamai and Anthropic Sign $11.6 Billion Agreement
Akamai Technologies shares rose 3.2% after the company announced a seven-year agreement to provide computing capacity to artificial-intelligence model developer Anthropic. The base value of the contract is $11.6 billion, with options for an additional $9 billion. If Anthropic requires further computing resources, the total value could exceed $20 billion.
The deal prompted investors to reassess the scale of Akamai's cloud-infrastructure business. Guggenheim analyst John DiFucci said the annual recurring revenue implied by the base contract is more than five times Akamai's $314 million in cloud-infrastructure revenue in 2025 and equivalent to about 40% of the company's total revenue of $4.2 billion.
DiFucci maintained a Buy rating on Akamai and raised his 12-month price target from $190 to $225. The agreement's conversion into recurring revenue will depend on Anthropic's computing needs, project delivery and contract execution. The stock's move showed that the market had already begun to price in the deal's potential effect on Akamai's cloud-business outlook.
Potential MGM-People Deal Draws Investor Attention
MGM Resorts shares fell 3.3%, while People shares climbed 11.3% as investors considered whether MGM might make an offer to acquire People. People had previously withdrawn a plan to acquire the casino and resort operator, making the potential reversal in transaction direction a focus for shareholders.
MGM shares fell 11% on Thursday. After People publicly proposed an offer of $48.30 per share, MGM's stock had given back all of its earlier paper gains and moved lower. As of September 24, People had a market capitalization of about $2.7 billion and owned roughly 27% of MGM. Based on the valuation before Thursday's close, that stake was worth about $8.5 billion.
People's MGM holding alone was valued at approximately $2.5 billion under the relevant valuation, more than the overall market value of People itself. The gap has drawn attention to the combined value of People's other assets and holdings. It also means any potential acquisition could involve questions over asset valuation, control arrangements and financing. Whether the two sides will proceed, along with the offer terms and final transaction structure, remains undecided.