On Friday, the S&P 500 inched down by 0.2%, while the Nasdaq declined by 0.5%. In contrast, the Dow Jones Industrial Average saw a modest rise of 35 points. This movement reflects investor sentiment as market participants evaluated potential Federal Reserve interest rate cuts amidst escalating geopolitical tensions in the Middle East. Federal Reserve Governor Waller hinted that rate reductions might commence as early as July, a statement that stands in stark contrast to Chair Powell's more reserved, data-driven approach.
Semiconductor giants such as Nvidia and TSMC experienced declines exceeding 1%, following reports that the U.S. government may rescind export exemptions, which stoked concerns over global chip supply stability. The geopolitical landscape grew more uncertain after President Trump postponed a decision regarding possible U.S. military action in the Israel-Iran conflict, even as Israel intensified its attacks on significant Iranian positions. Additionally, Friday's "triple witching" led to heightened volatility, spurring a recovery in shorter-term Treasuries and causing a four basis point drop in two-year yields.
For the week overall, the S&P 500 and the Dow dipped by 0.3% and 0.1%, respectively, while the Nasdaq managed to eke out a 0.1% gain.
