Nasdaq in the red as chipmakers come under pressure, Trump hits pause on Iran intervention

4:07pm: Stocks mixed at the close

All three major stock indexes finished the holiday-shortened week little changed as the Israel-Iran conflict ended its second week.

The Dow Jones closed 0.1% higher at 42,206 points, while the Nasdaq fell 0.5% to 19,447 points and the S&P 500 was 0.2% lower at 5,968 points.

2:52pm: Economic uncertainty driving decisions

This week was defined more by hesitation than clarity, Wells Fargo’s analysts have highlighted, as a growing sense of economic uncertainty is shaping both policy and business decisions. Despite a steady flow of data, the consensus is that visibility into the second half of the year remains limited.

The Federal Reserve’s updated projections reinforced this cautious tone, with policymakers signaling just 50 basis points of rate cuts for 2025 and trimming their expectations for 2026. Wells Fargo called the outlook “more stagflationary,” noting slower expected growth and persistently high inflation.

Trade policy is emerging as a key source of drag, with Wells Fargo pointing to early signs that tariffs are beginning to ripple through consumer behavior and business investment. The impact is expected to grow, adding another layer of complexity to an already uncertain macro environment.

Consumer data suggest a cooling trend, but the signals are uneven. Wells Fargo flagged the recent pullback in retail sales, particularly in autos and dining out, as a potential inflection point following earlier front-loaded demand.

Industrial activity remains weak, with capital expenditure decisions still stalled amid policy volatility. “Trade policy continues to stall capex decisions,” Wells Fargo wrote in a note, highlighting the lack of momentum in manufacturing outside of a few high-tech pockets.

Housing market dynamics add to the cautious picture. Sharp declines in multifamily construction and falling builder sentiment point to sustained pressure from high rates and broader uncertainty, reinforcing the view that the economy is slowing, but not yet stalling.

1:25pm: Chip stocks tumble

US stocks mostly reversed course in the early afternoon on Friday as investors grappled with the Fed’s next move, trade tensions and conflict in the Middle East.

The Nasdaq was down 0.4%, as chip stocks took a hit after the Wall Street Journal reported that the US wants to revoke waivers from top global semiconductor manufacturers used for accessing American technology in China.

The S&P 500 was down 0.2% as the Dow Jones added 0.1% at 42,213 points.  

Gold prices pulled back modestly, down about 0.7%, trading just below $3,400 per ounce.

“[Gold] remained lower on the weak after being unable to drive much higher despite the tensions between Israel and Iran for the past seven days,” City Index market analyst Fawad Razaqzada said.

“Out of all weeks it could have corrected itself, this week shouldn’t have been it, the bulls would argue. For that reason, there is some sign of weakness creeping into gold. But to declare an end to the bull trend when Iran and Israel are at each other’s throats would be a brave call by anyone.” The trend is still bullish and key support levels are still holding firm.”

12:27pm: Stocks on the move

Shares of GMS have surged 29% following billionaire Brad Jacobs’ QXO proposal to acquire the building-products distributor for about $5 billion in cash.

Kroger shares jumped 7% at market open Friday after the company raised its full-year same-store sales forecast and posted mixed first-quarter results.

Darden Restaurants, the parent company of popular dining chains including Olive Garden and LongHorn Steakhouse, saw its shares move higher on Friday as it reported better-than-expected financial results for the fiscal fourth quarter.

CarMax added almost 6% as the used car retailer’s fiscal first quarter earnings report impressed investors.

On the other hand, Accenture shares fell 7% after the professional services firm reported a 7% year-over-year drop in bookings to $19.7 billion. 

11:14am: Waller hints at July rate cut

Federal Reserve Governor Christopher Waller has indicated that the Fed could begin cutting interest rates as early as its July meeting, signaling a potential shift toward easing monetary policy.

“I think we’re in the position that we could do this as early as July,” Waller said in an interview with CNBC on Friday.  

The Fed's policymaking group remains somewhat divided on the path forward, with some officials expecting no cuts this year and others projecting two or three reductions by the end of 2025.

“Consolidation has been the theme in US stocks for some time, but hints of a more dovish approach from the Fed have been kept alive by Christopher Waller, who thinks the time has come for the Fed to cut rates,” IG chief market analyst Chris Beauchamp said.

“Even tariffs are not expected to provide a permanent boost to inflation, he added, bolstering the cause for ‘looking through’ any increase and focusing on the need to support the US economy.”

10:12am: Stocks edge higher

US stocks drifted higher at the open on Friday as investors weighed up the probability of an interest rate cut from the Fed in July amid geopolitical tensions.

The Dow Jones added 0.3%, the S&P 500 had added 0.2% and the Nasdaq was up 0.1%.

“News that President Trump would delay any decision on joining Israel’s attacks against Iran has boosted the market mood at the end of this week,” XTB research director Kathleen Brooks said. 

“The risk is that Trump changes his mind. However, like reciprocal tariffs, Trump sets movable deadlines.”

9am: Nasdaq futures to lead gain

Futures markets turned around shortly before the open, with the Nasdaq predicted to lead the gains when trading gets underway. 

Half an hour until trading starts, and the Nasdaq is expected to jump 0.4%, with Dow and S&P futures pointing to a 0.3% gain for both indices.

Europe's markets continue to trade higher as well, with London's FTSE 100 now up 0.34%, while the Frankfurt DAX is 1.5% higher and the Paris CAC 40 is 1% to the good. 

7.30am: Dow futures point down despite Trump's delay

US stock futures pointed to a weaker start on Friday as investors return from the Juneteenth federal holiday to news that US Donald Trump plans to take a couple of weeks to decide whether to intervene in the Israel-Iran conflict, now entering its second week. 

Two hours before trade resumes, futures for the Dow Jones were down 0.2%, while those for the S&P 500 and Nasdaq were between 0.1% to 0.2% lower.  

"Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks," Trump said in a message delivered by White House press secretary Karoline Leavitt.

While the US appears to have temporarily pulled back from the prospect of intervening directly in the Israel-Iran conflict, the possibility still looms, noted AJ Bell's Dan Coatsworth.

“While the immediate prospect of a US intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," Coatsworth commented.

"A meeting of European ministers with their Iranian counterparts to try and formulate a deal today could be crucial.”

In Europe, major indexes are trading higher. London's FTSE 100 has gained 0.5%, Frankfurt's DAX is up 0.9%, and the CAC 40 in Paris is 0.6% firmer.

Asian markets closed mixed. Tokyo's Nikkei 225 shed 0.2%, the Shanghai composite ended a couple of points down, but the Hang Seng in Hong Kong climbed 1.3%.