BEIJING (AP) — Asian stock markets followed Wall Street lower on Friday after rising U.S. bond yields dampened buying enthusiasm driven by the Federal Reserve’s promise of low interest rates.

Shanghai, Tokyo, Hong Kong and Sydney retreated.

Overnight, Wall Street’s benchmark S&P 500 index closed down 1.5%, putting it on track for its first weekly loss in three weeks. Stocks slipped after bond yields rose, which can prompt investors to shift money out of stocks.

A day earlier, the S&P 500 hit a new high after the Fed promised to keep its key interest rate near zero through 2023 even as it forecast inflation will pick up.

“The rapid rise in long-end U.S. yields has spooked investors,” Stephen Innes of Axi said in a report. The sell-off “caught some investors wrong-footed” after the Fed’s pledge, he said.

The Shanghai Composite Index sank 1% to 3,426.59 and the Nikkei 225 in Tokyo lost 0.8% to 29,961.75. The Hang Seng in Hong Kong retreated 1.4% to 29,015.89.

The Kospi in Seoul shed 1% to 3,035.47 while Sydney’s S&P-ASX 200 gave up 0.3% to 6,728.70. New Zealand retreated while Singapore gained.

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Investors are swinging between hopes the rollout of coronavirus vaccines will allow global business and travel to resume and fears of possible inflation caused by government stimulus spending and easy credit.

The market’s pullback undercut some of Wednesday’s gains, when the S&P 500 and Dow hit all-time highs after the Federal Reserve said U.S. economic growth should rebound to 6.5% this year — the strongest since the 1980s — and inflation will climb above 2% for the first time in years.

Chairman Jerome Powell said the Fed will keep rates low even as inflation accelerates. Central banks usually try to restrain price rises by hiking rates. But Fed officials have said the U.S. economy will be allowed to “run hot” to avoid derailing a recovery.

Stocks fell back Thursday after the yield on the 10-year U.S. Treasury note, or the difference between its market price and the payout if held to maturity, widened to 1.72%, its highest since January 2020.

A higher yield can make bonds more attractive, drawing money out of stocks, especially high-priced tech giants that powered last year’s market rebound. Apple shares fell 3.4%, Microsoft lost 2.7% and Tesla slumped 6.9%.

The S&P 500 fell to 3,915.46. The Dow Jones Industrial Average lost 0.5% to 32,862.30. The Nasdaq slid 409.03 points to 13,116.17.

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Bank stocks did well because investors bet higher interest rates would translate into higher profits. Wells Fargo rose 2.4%, Bank of America added 2.6% and JPMorgan Chase gained 1.7%.

Also Thursday, the Labor Department said the number of Americans who filed for unemployment benefits last week rose to 770,000, well above historic levels.

In energy markets, benchmark U.S. crude lost 6 cents to $60.00 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for international oil prices, lost 1 cent to $63.27 per barrel in London.

The dollar edged down to 108.99 from Thursday’s 109.00. The euro declined to $1.1906 from $1.1915.