The S&P 500 fell on Friday as investors monitored the latest developments out of the Middle East. Traders also contemplated the path of future interest rate cuts by Federal Reserve.
The broad market index declined 0.22% to end at 5,967.84, while the Nasdaq Composite dropped 0.51% and settled at 19,447.41. 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 that the U.S. may revoke waivers for some semiconductor manufacturers. Nvidia was down more than 1%, while Taiwan Semiconductor Manufacturing slid nearly 2%. The VanEck Semiconductor ETF (SMH) was lower by nearly 1%.
The S&P 500 started off the trading session higher after Federal Reserve Governor Christopher Waller said that the central bank could cut rates as early as July. “I think we’re in the position that we could do this and as early as July,” Waller said during a “Squawk Box” interview.
“That would be my view, whether the committee would go along with it or not,” he added.
This comes after Fed Chair Jerome Powell said Wednesday the central bank was in no hurry to cut benchmark rates and will remain data dependent, especially as it remains unclear how President Donald Trump’s tariffs will impact the economy. The S&P 500 closed slightly lower that day following those remarks.
Trump ripped into Powell again Thursday, saying the Fed Chair is costing the U.S. “hundreds of billions of dollars” by delaying rate cuts. The president said ahead of the Fed’s decision Wednesday that “stupid” Powell “probably won’t cut” rates.
Tensions around the Israel-Iran conflict also remained high, as Israeli Prime Minister Benjamin Netanyahu is reportedly ordering Jerusalem’s military to strike “strategic targets” in Iran, as well as “government targets.”
Trump is weighing direct U.S. involvement with a strike on Tehran, with the White House on Thursday saying that he will make a final decision within the next two weeks. Trump previously called for Tehran’s complete surrender, to which Iran’s supreme leader, Ayatollah Ali Khamenei, labeled the notion “threatening and ridiculous.”
“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. He also pointed out that the S&P 500 is still trading at just around 3% below its recent 52-week high, saying that “prior highs act like rusty doors and require several attempts before finally swinging open.”
“If there’s a calming down of the geopolitical activities, then you know that could be helpful,” he continued.
For the week, the S&P 500 was about 0.2% lower. The 30-stock Dow eked out a 0.02% gain on the week, while the Nasdaq advanced 0.2%.
