Stocks fell for a third consecutive session on Friday as investors remained cautious as the United States-Israeli war on Iran continues for another week.

Wall Street remained under pressure on Friday on reports of more attacks from both sides of the U.S.-Israeli and Iran conflict, keeping oil futures tied to any new headlines out of the Middle East. Brent crude futures traded near $105 a barrel on Friday, while West Texas Intermediate remained around $97 per barrel.

In response to dimming market sentiment, Morgan Stanley Chief U.S. Economist Michael Gapen called investor fears that the Federal Reserve will raise interest rates this year instead of issue another cut "overdone."

"In light of higher oil prices, we revise our outlook for 2026 in favor of less growth, more inflation, higher unemployment, and later Fed cuts. Our outlook for two Fed rate cuts stands in stark contrast to current market pricing, which has hints of rate hikes," Gapen wrote on Friday, adding that the firm pushed its rate cut timeline to September and December versus its prior June and September forecast.

On the earnings front, FedEx (FDX  ) delivered a strong first third quarter late Thursday and raised its full-year guidance, now calling for revenue growth of 6% to 6.5%. The company also raised its fiscal 2026 adjusted earnings per share outlook to a range of $19.30 to $20.10 from its previous $17.80 and $19 guidance range.

"Team FedEx delivered another quarter of strong financial results and excellent service for our customers, powered by disciplined operational execution, the resilience of our global network, and the accelerating impact of our advanced digital solutions," CEO Raj Subramaniam said in a statement.

Bank of America analyst Ken Hoezter raised FedEx's price target to $440 following the results, implying a more than 23% gain from the stock's closing price on Thursday. The analysts also maintained the stock's Buy rating, highlighting the company's strong market share gains, increased network integration, yield growth and its upcoming freight spin-off.

"FedEx is showing solid momentum in winning share and managing its costs and network transformation in what remains a volatile global trade backdrop," Hoezter wrote in a note to clients on Thursday.

Looking ahead, market participants are in for another busy week of economic releases next week, with key reports on manufacturing and services sectors, consumer sentiment, and a series of speeches from Federal Reserve officials.

The earnings season is winding down, but reports from GameStop (GME  ), KB Home (KB  ), PDD Holdings (PDD  ), Chewy (CHWY  ), and Carnival Corp (CCL  ) are expected to capture investor attention.