FX.co ★ US Stocks Fall on Fed Split and Rising Middle East Risks

In the afternoon trading session, U.S. stocks shifted into negative territory, influenced by speculation over potential Federal Reserve rate cuts and rising tensions in the Middle East. The S&P 500 experienced a 0.3% decline, the Nasdaq fell by 0.7%, and the Dow Jones Industrial Average dropped by 40 points. Fed Governor Waller's indication that rate reductions might be imminent by July starkly contrasted with Chair Jerome Powell's more cautious and data-driven approach. Semiconductor stocks, such as Nvidia, Broadcom, and TSMC, saw declines of over 1% amid reports that the U.S. might revoke certain export waivers. The geopolitical climate became more tense as President Trump delayed a decision on U.S. military involvement in the ongoing Israel-Iran conflict, despite Israel intensifying its strikes on key Iranian targets. The "triple witching" event on Friday contributed to market volatility, leading to a rally in short-term U.S. Treasuries and causing a four basis point drop in two-year yields. For the week, the S&P 500 and Nasdaq posted gains of 0.2% and 0.5%, respectively, while the Dow saw an increase of 0.3%.