The local share market has staged a remarkable recovery, bouncing off a low hit six months ago in early trading and rebounding in the afternoon to finish the day flat.
After dropping 1.5 per cent in the first 10 minutes of trading, the benchmark S&P/ASX200 index steadily clawed back its losses to finish Friday up 3.6 points or 0.05 per cent, at 7,068.8. The broader All Ordinaries closed up 3.4 points, or 0.05 per cent, to 7,270.
For the week, the ASX200 lost 2.9 per cent - its worst week in a year - but the rebound at least provided a ray of hope after the index dipped briefly into the red for the year.
"There wasn't really an appetite to drive it even lower," City Index analyst Matt Simpson told AAP. "You've got a big level at 7,000. Such big, round numbers rarely break that easily."
While the ASX200 gapped beneath 7,000 during the day's trading, "it was pretty hard to keep it down there, clearly, because you've erased all the day's losses," Mr Simpson said.
"You've got an aggressive down move and an aggressive up move - so no winners and losers, but it was a bit of a ride on the way," Mr Simpson said.
The volatility was triggered by the US Federal Reserve predicting early on Thursday it would not begin cutting rates next year as rapidly as previously forecast.
Weekly US jobless claims also dropped to an eight-month low in figures released overnight, suggesting it would indeed be feasible for the Fed to keep rates high into 2024.
All that has led to a sell-off in US bonds, sending 10-year treasury yields to 4.51 per cent, their highest levels since 2007.
"If bond yields keep on screaming higher, then we get to the point where something's going to break at some point," Mr Simpson said, adding that he couldn't say exactly what kind of black swan event might occur.
"Every single major catastrophe hasn't been predicted by everybody or anybody - apart from a select few, nobody predicted the mortgage crisis, nobody predicted COVID," he said.
"I think the environment now is probably a bit more similar to 2006, 2007, before the big crash, and I'm not saying there's going to be there's going be a subprime mortgage crisis, but at some point the stock market decouples."
In March, soaring bond yields were a major factor in the collapse of several mid-small to mid-sized US banks, and yields now are higher than they were then.
Capital.com analyst Kyle Rodda was more sanguine, writing that there were no "blaring alarms" indicating markets were about to buckle, but he acknowledged that such events tended to creep up on markets.
Six of the ASX's 11 sectors finished in the green on Friday, and five in the red.
The interest-rate-sensitive property sector was the biggest mover, falling 1.5 per cent as Goodman Group dropped 2.2 per cent and Mirvac fell 2.3 per cent.
The heavyweight mining sector gained 0.6 per cent, with BHP up 0.5 per cent to $44.34, Fortescue climbing 1.5 per cent to $20.81 and Rio Tinto falling 1.2 per cent to $114.57.
Among the Big Four banks, CBA was flat at $100.06, ANZ edged 0.1 per cent lower at $25.03, NAB climbed 0.5 per cent to $28.88 and Westpac gained 0.7 per cent at $21.14.
The Australian dollar was buying 64.33 US cents, from 64.18 US cents at Thursday's ASX close.
ON THE ASX:
* The S&P/ASX200 index finished Friday up 3.6 points at 7,068.8, a gain of 0.05 per cent.
* The All Ordinaries added 3.4 points, or 0.05 per cent, to 7,270.0.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.33 US cents, from 64.18 US cents at Thursday's ASX close
* 95.39 Japanese yen, from 95.15 Japanese yen
* 60.42 Euro cents, from 60.31 Euro cents
* 52.45 British pence, from 52.08 British pence
* 108.07 NZ cents, from 108.45 NZ cents
