U.S. Markets Close Higher Friday as Oil Cooldown Eases Pressure; S&P 500 Within Striking Distance of Record

All three major indexes capped off their first winning week in three, driven by AI momentum and falling crude prices despite Treasury yields hovering near multi-decade highs.

Wall Street closed out Friday, September 25, 2026, with solid gains across the board, as a sharp drop in oil prices and persistent enthusiasm for artificial intelligence investments helped investors look past a troubling surge in Treasury yields.

Major Indexes Close Higher

The S&P 500 rose 39.28 points, or 0.5%, to close at 7,743.41, pulling within just 0.7% of its all-time high set last month . The benchmark index posted a weekly gain of 1.2% .

The Dow Jones Industrial Average outperformed, climbing 478.64 points, or 0.9%, to 51,828.62 . The Nasdaq Composite added 129.34 points, or 0.5%, to finish at 27,068.72 . For the week, the tech-heavy Nasdaq surged 2.1%, while the Dow eked out a 0.3% gain .

The Russell 2000 index of smaller companies rose slightly, gaining 0.1% to 2,837.55 .

Oil Cooldown Releases Pressure

The session’s most significant catalyst was a 2%+ drop in crude oil prices. Brent crude settled down $2.28 at $104.32 per barrel, while West Texas Intermediate fell $2.20 to $92.41 . The decline followed reports that U.S. and Iranian negotiators were exploring a phased deal to reopen the Strait of Hormuz, which would involve Tehran allowing shipping traffic in exchange for Washington lifting its economic blockade .

The oil cooldown helped ease some of the pressure that had built up on Wall Street, allowing Treasury yields to stabilize after the 10-year yield briefly jumped near its highest level since 2007 .

AI Momentum Continues

Artificial intelligence optimism remained a powerful market driver. Microsoft jumped 4.1%, contributing 120 points to the Dow, after repositioning its Copilot AI assistant as a pure enterprise product . Akamai Technologies rallied after announcing an **$11.6 billion cloud services deal** with AI developer Anthropic — a seven-year agreement that could expand by another $9 billion . The stock surged as much as 23% before paring gains .

Meta Platforms posted double-digit weekly gains after its new Muse AI agent became the top free app on Apple’s App Store, outpacing ChatGPT’s early download pace . AMD also crossed the $1 trillion market capitalization milestone for the first time earlier in the week, fueled by renewed demand for AI chips .

Yields Remain a Concern

Despite Friday’s gains, the bond market continued to cast a shadow. The 10-year Treasury yield climbed 5 basis points to 5.21% during midday trading, while the 30-year yield touched 5.53% — its highest level since 2004 . The yield surge followed stronger-than-expected U.S. business activity data, with the September services PMI hitting 58.7, the strongest reading in nearly five years .

Traders now price in a 66% to 68% chance of a quarter-point Fed rate hike at the October policy meeting, up from roughly 50% a week earlier . Federal Reserve officials struck a hawkish tone, with Philadelphia Fed President Anna Paulson noting that inflation “remains stubbornly elevated” .

What This Means for Investors

Friday’s session reflects a market attempting to balance two competing forces: strong AI-driven earnings momentum against rising borrowing costs that threaten to compress valuations. The S&P 500’s ability to hold near record highs despite 10-year yields above 5% suggests investors are betting that AI investment and economic growth can outpace the rate headwind — at least for now.

However, consumer sentiment slipped in September as high living costs ate into household budgets , and the fear gauge VIX remained in “Fear” territory at 38/100 . Next week brings the PCE inflation index and nonfarm payrolls, two data releases that could either validate the bulls’ case or give the Fed more reason to tighten further