US and European stocks had a mixed finish on Friday, capping a week that saw equities set new records on both sides of the Atlantic but also struggle with inflation fears.

In Europe, London’s FTSE 100 gained as a weaker pound helped take the sting out of data showing Britain’s economy tanked amid the latest COVID-19 lockdown, and post-Brexit exports to the EU plunged.

In the eurozone, Frankfurt’s DAX 30, which has streaked to fresh highs repeatedly this week, gave up gains made the previous day after the European Central Bank boosted sentiment by promising more support for the economy if needed.

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The Dow and S&P 500 managed to edge to new records for the second day straight day in New York trading, but rising bond yields amid fears of oncoming inflation kept investors away from tech stocks, sending the Nasdaq down 0.6% at the close.

“There is a tug of war in the market regarding where inflation will settle,” Quincy Krosby of Prudential Financial said.

Traders are watching how US President Joe Biden’s $1.9 trillion stimulus package will impact the economy, as well as mulling added push from the infrastructure package he is expected to soon propose.

“No one is suggesting at this point that we will be due for hyperinflation,” Krosby said. But since the Federal Reserve has made it clear they will run the economy hotter, markets are now wondering, “how hot?”

Asian stock markets earlier closed mostly higher.

Less than two months after taking office, Biden on Thursday put his signature on the huge rescue plan, which paves the way for a spending splurge widely seen as ramping up both domestic and global growth.

The package — which includes up to $1,400 in cash handouts, extended unemployment benefits and other aid programs — comes as the US government accelerates its vaccine drive against the coronavirus.

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The ECB’s decision Thursday to ramp up its own stimulus, or bond-buying program, provided some calm to markets.

Observers said the ECB move signaled to investors that central bank officials around the world were ready to step in to keep their monetary policies ultra-low for as long as needed to help the economy get back on track.

However, an increase in money market rates this year has led some economists to fear that the largesse of global central banks and central governments will cause a surge in inflation, potentially leading to an end of the cheap cash that has powered a year-long equity rally.

Those fears were in play once again on Friday, analysts said, pointing to the rate on benchmark 10-year US government bonds rising above 1.6%.

“After some relative calm on the interest rate front, another jump in the 10-year Treasury yield seems to be pressuring stocks,” said JJ Kinahan, chief market strategist at TD Ameritrade.

“It seems that the pressure on the Nasdaq is coming amid a reallocation from tech stocks and into cyclical equities” that benefit from an increase in economic growth, he said. “While such a shift can be unnerving, it’s nothing to panic about.”

New York – Dow: UP 0.9% at 32,778.64 (close)

New York – Nasdaq: DOWN 0.6% at 13,319.86 (close)

New York – S&P 500: UP 0.1% at 3,943.34 (close)

EURO STOXX 50: DOWN 0.3% at 3,833.36 (close)

London – FTSE 100: UP 0.4% at 6,761.47 (close)

Frankfurt – DAX 30: DOWN 0.5% at 14,502.39 (close)

Paris – CAC 40: UP 0.2% at 6,046.55 (close)

Tokyo – Nikkei 225: UP 1.7% at 29,717.83 (close)

Hong Kong – Hang Seng: DOWN 2.2% at 28,739.72 (close)

Shanghai – Composite: UP 0.5% at 3,453.08 (close)

Euro/dollar: DOWN at $1.1952 from $1.1982 at 2200 GMT

Pound/dollar: DOWN at $1.3922 from $1.3984

Euro/pound: UP at 85.82 pence from 85.66 pence

Dollar/yen: UP at 109.00 yen from 108.53 yen

Brent North Sea crude: DOWN 0.7% at $69.18 per barrel

West Texas Intermediate: DOWN 0.7% at $65.56 per barrel