The stock market fell on Friday as investors monitored the latest developments in the Middle East and contemplated future interest rate cuts by the Federal Reserve. The S&P 500 declined 0.22% to end at 5,967.84, marking its third consecutive losing session. The Nasdaq Composite dropped 0.51%, settling at 19,447.41, while the Dow Jones Industrial Average ticked up 35.16 points, or 0.08%, closing at 42,206.82.
Chip stocks came under pressure following a report by The Wall Street Journal regarding restrictions on U.S. semiconductor manufacturers. The technology sector was down more than 1%, with specific sub-sectors experiencing nearly 2% declines. The S&P 500 started off the trading session higher after Federal Reserve Governor Christopher Waller indicated that the central bank might be in a position to adjust interest rates.
“I think we’re in the position that we could do this as early as July,” Waller said. This comes after Fed Chair Jerome Powell stated Wednesday that the central bank was in no rush to cut benchmark rates and would remain data-dependent, especially given uncertainty over President Donald Trump’s tariffs. In global affairs, tensions around the Israel-Iran conflict remained high, with Israeli Prime Minister Benjamin Netanyahu reportedly ordering military strikes on strategic targets in Iran.
President Trump is considering direct U.S. involvement, with the White House indicating a decision is imminent. This geopolitical uncertainty has added to market volatility. “With so much uncertainty going on in this world, who really wants to go long over the weekend,” said Sam Stovall, chief investment strategist at CFRA Research.
Despite the declines, he noted that the S&P 500 is still trading just around 3% below its recent 52-week high. For the week, the S&P 500 was down about 0.2%. The Dow eked out a 0.02% gain, while the Nasdaq advanced 0.2%.
Several stocks hit new milestones on Friday:
– Molson Coors and Constellation Brands marked new 52-week lows.
Market reacts to Middle East tensions
– Stocks like Apple, Microsoft, and Amazon reached new 52-week highs.
Morgan Stanley suggested that the Federal Reserve’s annual stress test for banks this year will be “less strenuous” compared to 2024. Analyst Betsy Graseck noted that this year’s test should result in lower drawdowns in Common Equity Tier 1 ratios for most banks. JPMorgan recommended buying the dip in Arista Networks.
Analyst Samik Chatterjee highlighted potential upside in AI networking markets despite recent underperformance, noting the stock’s year-to-date loss of 18%. Ether ETFs have shown a resurgence, with funds tracking the price of ether on pace for their sixth consecutive week of inflows. Despite this, the price of ether remains flat for the past month.
Circle saw an 18% increase in its stock price following the Senate’s approval of its proposed stablecoin legislation, the GENIUS Act. Circle’s stock is on pace to end the week up by more than 77%. CarMax jumped 6% after reporting first-quarter results that exceeded analyst expectations, posting earnings of $1.38 per share on $7.55 billion in revenue.
GXO Logistics rose more than 11% after raising its full-year earnings outlook and appointing Patrick Kelleher as CEO. Building stocks surged on reports of a bidding war for GMS Inc. Late Wednesday, billionaire Brad Jacobs announced an all-cash offer of $95.20 per share.
By Friday, it was revealed that Home Depot had also made an undisclosed offer. Shares of GMS surged 28%, while building stocks like ABC Supply and Beacon Roofing Supply gained more than 4%. The stock markets ended mixed on Friday, influenced by geopolitical tensions and Federal Reserve signals.
Robust earnings reports and corporate moves provided some bright spots amid the uncertainty.