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US STOCKS FALL AS YIELDS JUMP; NASDAQ LEADS THE DECLINE

U.S. stock indexes are down in early trading on Friday, with the Nasdaq .IXIC off more than 1% as bond yields surged to a one-year high and inflation worries increased.

Longer-dated Treasury yields climbed as a spike in oil prices stoked fears that ongoing energy disruptions in the Middle East could further fuel inflation.

The declines in stocks also follow a series of record-high closes on the S&P 500 .SPX and Nasdaq.

"Some of the air is coming out of some of these stocks that have gone parabolic," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "But I do think there is a real fear that inflation is kind of embedded in the economy going forward. You don't see any signs of it going down right now, and that is a real fear and will drive the market down if it continues."

"Being a Friday adds to it," he said. "People are afraid now that something will happen again with the Middle East."

He and other market watchers said investors may be disappointed that more progress was not made in talks with China.

U.S. President Donald Trump left China on Friday with no major breakthroughs on trade or tangible help from Beijing to end the Iran war, despite two days spent heaping praise on his host, Xi Jinping.

Here is the morning market snapshot:

(Caroline Valetkevitch)

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