Stocks were muted on Friday as investors mulled over the latest developments surrounding current market drivers: the Middle East, the Federal Reserve's timeline on cutting interest rates, and semiconductor moves.
The Dow Jones Industrial Average
Tensions in the Middle East have captured much of the market's attention this week, simmering over on Thursday after President Donald Trump said he is giving Iran a "substantial chance" for negotiations within the next two weeks as he weighs entering the United States directly into the conflict, according to White House Press Secretary Karoline Leavitt.
These comments followed Israeli Prime Minister Benjamin Netanyahu reportedly ordering his nation's military to strike "strategic targets" in Iran. Trump had called for Tehran's complete surrender earlier this week.
The Federal Reserve was also impacting outlooks on Friday after central bank Governor Christopher Waller signaled policymakers could cut interest rates as early as July, speeding up Wall Street's previous timeline that saw cuts starting in September.
"Why do we want to wait until we actually see a crash [in the labor market] before we start cutting rates?," Waller asked rhetorically during an interview with CNBC's Steve Liesman. "So I'm in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting, because we don't want to wait until the job market tanks before we start cutting the policy rate."
Waller's remarks come after policymakers held rates steady again on Wednesday, with Fed Chair Jerome Powell stating that the central bank is waiting for more economic data before changing its policy stance, especially in response to uncertainty surrounding the long-term impact of Trump's tariffs.
Trump called Powell "destructive" in a Truth Social post on Thursday, adding that the Fed leader is costing the U.S. "hundreds of billions of dollars" by holding rates at the same level since December.
Rounding out market drivers on Friday, semiconductor stocks took a hit after the Wall Street Journal reported that the White House may revoke waivers for manufacturers that allow companies to access American technology in China. Shares of Nvidia
Wall Street ended the holiday-shortened week mixed as well, reflecting the persistent uncertainties weighing on investor outlooks. The broader market S&P 500 settled about 0.2% lower, while the Dow has rose 0.02% and the tech-heavy Nasdaq has added 0.2%.
