By Stephen Culp and Niket Nishant
NEW YORK, Sept 18 (Reuters) - Wall Street was mixed on Friday as benchmark US Treasury yields topped 5%, and crude prices reversed earlier gains but remained above $100 per barrel, keeping inflation worries front and center.
Investors approached the end of a week that was essentially split in two: first, restless anticipation in the days before the US Federal Reserve's widely expected interest rate hike, and then the aftermath of that decision.
A semiconductor rally
helped the Nasdaq evade the broader selloff, which pulled the S&P 500 and the Dow marginally lower.
The S&P 500 is on track to end the session with a weekly loss, while the tech-laden Nasdaq is on course to end nominally higher than last Friday's close. The blue-chip Dow is headed for its biggest weekly percentage decline since March.
Inflation concerns remained prominent as crude prices stayed above $100 per barrel, but they paused their upward climb after China, at the request of Saudi Arabia, asked Iran to limit attacks by Houthi rebels on Saudi oil infrastructure.
Soaring oil prices have sent diesel prices to record levels, which is likely to translate into broader inflationary pressures affecting farming and shipping costs.
"There's no question that the elevated oil prices are bleeding into different sections of the economy," said Matthew Keator, managing partner at the Keator Group, a wealth management firm in Lenox, Massachusetts. "And the Fed has referenced that as part of their dilemma in terms of its position on rates."
Central banks around the globe have embarked on a policy-tightening cycle to rein in bond yields and tame inflation fueled by the Iran war.
The Bank of Japan lifted interest rates to a 31-year high, following in the footsteps of the Federal Reserve and the European Central Bank, in an effort to control global inflation. The Bank of England was the odd man out, holding rates firm but warning of future hikes.
Financial markets are currently pricing in a 57.6% probability of another Fed rate hike at the central bank's October meeting, up from 42.5% last Friday and 7.2% a month ago, according to CME's FedWatch tool.
The Dow Jones Industrial Average fell 174.35 points, or 0.34%, to 51,603.46, the S&P 500 lost 8.92 points, or 0.12%, to 7,628.84 and the Nasdaq Composite lost 0.35 point, or 0.00%, to 26,417.95.
Among the 11 major sectors in the S&P 500, technology stocks were the sole gainers, with an assist from microchips. Utilities suffered the steepest percentage loss.
Berkshire Hathaway announced that Warren Buffett will step aside as chairman to become chairman emeritus, nine months after handing the CEO position to Greg Abel. The holding company's shares edged 0.1% higher.
Xenon Pharmaceuticals tumbled 30.1% after it temporarily paused enrollment in clinical studies testing its experimental drug for major and bipolar depression, following reports of side effects.
Cryptocurrency-linked firms Coinbase, Strategy and Robinhood gained between 9.2% and 14.6% as bitcoin prices jumped 5.7%.
The quarterly expiry of derivatives contracts tied to stocks, index options and futures, known as "triple witching," could contribute to heightened volatility.
Declining issues outnumbered advancers by a 2.2-to-1 ratio on the New York Stock Exchange. There were 64 new highs and 269 new lows on the NYSE.
On the Nasdaq, 1,768 stocks rose and 2,915 fell as declining issues outnumbered advancers by a 1.65-to-1 ratio.
The S&P 500 posted five new 52-week highs and 28 new lows while the Nasdaq Composite recorded 32 new highs and 123 new lows.
(Reporting by Stephen Culp in New York; Additional reporting by Niket Nishant and Tharuniyaa Lakshmi in Bengaluru; Editing by Matthew Lewis)
