U.S. stock indexes closed higher on Friday, with the S&P 500 ending up 0.42%, the Dow rising 0.29% and the Nasdaq 100 gaining 0.33%. The move was supported by a rebound in risk appetite after oil prices slid and investors drew comfort from continuing U.S.-Iran dialogue, helping lift broader equities toward a five-week high.
At the same time, trading remained selective: chip stocks found momentum after South Korea’s SK Hynix jumped more than 12% in its first day in the Nasdaq 100, while weakness in cybersecurity shares limited the broader advance. Investors also looked ahead to the start of second-quarter earnings next week, with forecasts pointing to a strong earnings growth backdrop driven largely by AI-related spending.
Key takeaways
- Price move: The S&P 500 rose 0.42%, while the Dow added 0.29% and the Nasdaq 100 gained 0.33%.
- Catalyst: Stocks turned higher after crude prices whipsawed lower on news flow around U.S.-Iran ceasefire language and ongoing peace talks.
- Sector impulse: Chip shares strengthened following SK Hynix’s jump, offset by losses in cybersecurity stocks.
- Earnings focus: Expectations for strong second-quarter earnings supported the market into the earnings start next week.
- Rates backdrop: Treasury yields rose after the rally reduced safe-haven demand for government debt.
What drove the move
Friday’s rise in major U.S. indexes followed a shift in geopolitical and energy sentiment. According to the report, stocks gained traction after crude oil prices fell nearly 1% following remarks attributed to President Trump indicating U.S. officials had told Iran the ceasefire was “over,” while the U.S. would continue peace talks. An American official also said talks with Iran over a permanent deal were continuing, reinforcing expectations that diplomacy could remain the primary channel.
The market impact of geopolitics showed up in energy and risk assets simultaneously. WTI crude oil (as referenced in the report) declined for the session, and while crude losses were described as limited—after Iran vowed retaliation for U.S. attacks on rail and maritime infrastructure—oil weakness nonetheless supported equities and reduced concerns over inflation spillovers.
In equity-specific trading, investor attention centered on the chip complex. Data cited in the report showed SK Hynix surged more than 12% in its first day of trading in the Nasdaq 100, helping chipmakers recover from early losses. However, the broader rally faced resistance from cybersecurity stocks, which dragged on sentiment for parts of the tech sector.
Market reaction across stocks, rates and overseas
Treasury price action moved in line with changing safe-haven demand. According to the report, September 10-year Treasury notes ended lower on Friday, with the 10-year yield rising about 1.4 basis points to 4.565%. The decline in T-note prices was attributed to the S&P 500 rally, which curbed demand for government debt, along with easing geopolitical risk.
The report also pointed to supportive factors for bonds that prevented larger moves: crude oil fell nearly 1%, which was described as lowering inflation expectations, and bond dealer short covering helped lift T-notes. It cited hedging activity tied to a new Treasury supply of $119 billion in 10-year notes and Treasury bonds.
International markets finished mixed. The report said the Euro Stoxx 50 fell 0.23%, China’s Shanghai Composite dropped 1.00% after easing from a one-week high, while Japan’s Nikkei 225 gained 1.20%.
Earnings expectations and company-level movers
Beyond geopolitics and oil, investors anchored to an earnings calendar. The report said forecasts compiled by Bloomberg Intelligence call for second-quarter earnings to increase by 23%, compared with 30% growth in the first quarter and an earlier expectation of 12%. It added that AI spending is expected to contribute heavily to earnings, with AI infrastructure companies projected to account for nearly 60% of the S&P 500’s earnings-per-share growth in the quarter.
Stock moves reflected that narrative, but with clear differentiation between sub-industries. On the downside, cybersecurity names led declines in the Nasdaq 100, including Okta (down more than 6%) and CrowdStrike (down more than 5%). Other reported laggards included Zscaler, Palo Alto Networks and Fortinet, while Cloudflare also declined.
On the upside, some single-stock catalysts were company- and news-driven. EquipmentShare.com shares jumped more than 17% after the company raised its full-year adjusted core EBITDA range and announced a $500 million share buyback program. WD-40 shares gained more than 10% after the company increased its full-year net sales forecast. Meta Platforms rose more than 5% after a research firm issued a positive assessment of its AI computing business.
Other notable gainers in the report included Nvidia after the U.S. Commerce Department said the UAE qualifies for easier treatment under U.S. export control laws, which would allow the country to buy advanced AI chips from Nvidia; Jackson Financial after a Jeffries upgrade; and Circle Internet Group after it received approval to establish a national trust bank offering digital asset services. On the downside, Netflix fell more than 2% following a Wall Street Journal report about steps the company is considering to address signs of declining subscriber engagement. Delta Air Lines also declined more than 2% after reporting second-quarter passenger revenue of $15.61 billion, slightly below consensus of $15.63 billion.
Bigger picture: policy expectations and what to watch next
Rate expectations remained an important variable even as equities advanced. The report stated markets were discounting a 32% chance of a 25-basis-point rate hike at the next FOMC meeting on July 28–29. Separately, it said swaps were discounting a 12% chance of a 25-basis-point ECB rate hike at the ECB’s next policy meeting on July 23.
Looking ahead, investors are likely to focus on the first wave of second-quarter earnings starting next week, particularly results and guidance tied to AI demand. With oil and U.S.-Iran developments also still influencing positioning, attention will likely remain on further updates to geopolitical negotiations and any fresh moves in crude prices that could shift inflation expectations and bond-market pricing.
