Wall Street rises amid focus on bond yields and Iran

The main US stock indices have closed higher but showed declines for the week, which was marked by investor jitters over fluctuating government bond yields and a lack of clarity on progress in the Middle East.

The S&P 500 and the tech-heavy Nasdaq snapped three-week winning streaks while the Dow registered its second consecutive weekly loss.

Equity investors have been taking their cues from the direction of US government bond yields in recent sessions as the prospect of higher borrowing costs dampened risk appetite.

Stocks had closed lower on Thursday as bond yields rose while equities had advanced on Wednesday as bond yields fell.

US Treasury Secretary Scott Bessent said on Thursday that the government could further increase its Treasury repurchases after a surprise announcement on Wednesday that it would spend double the expected amount on bond buybacks.

After a seesaw trading week on Wall Street, Chris Zaccarelli, chief investment officer at Northlight Asset Management in Charlotte, North Carolina, said that Friday seemed calmer.

"In the middle of the week, equity investors were concerned yields could be on a one-way trip higher. With the Treasury Department announcement, investors aren't as worried any more," he said.

Also helping to ease investor worries was Friday's economic data, which showed that the strongest growth in the US services sector in nearly two years powered a sharp acceleration in overall business activity in August.

This offset a slowing of growth in a manufacturing sector that is being restrained by reduced stock building and supply disruptions from the Iran war.

Earlier, UBS Global Wealth Management raised its year-end target for the S&P 500 to 8,100, citing a stronger earnings outlook and robust corporate profit growth.

Adding to inflation concerns, however, oil futures settled higher for a sixth straight day, after US President Donald Trump threatened economic sanctions on Iran's trading partners, raising expectations of tighter supply.

For the week, Brent futures gained 6.39 per cent while US crude rose 5.66 per cent.

The Dow Jones Industrial Average rose 517.80 points, or 0.98 per cent, to 53,277.01, the S&P 500 gained 33.21 points, or 0.43 per cent, to 7,674.37 and the Nasdaq Composite gained 113.29 points, or 0.44 per cent, to 26,180.46.

For the week, the S&P 500 fell 1.43 per cent, the Nasdaq declined 2.05 per cent and the Dow fell 0.85 per cent.