U.S. stock markets ended Friday’s session mixed, as investors grappled with a volatile mix of central bank signals, geopolitical uncertainty, and policy noise from Washington. With the Federal Reserve hinting at the potential for rate cuts and former President Donald Trump weighing U.S. military action in the Middle East, traders were left parsing through headlines that offered little in the way of clarity.
The Dow Jones Industrial Average (^DJI) eked out a modest gain, closing just above flat. In contrast, the broader S&P 500 (^GSPC) slipped 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) posted a steeper drop of 0.5%. All three major indexes were little changed overall during the shortened trading week, as holiday-thinned volumes added to the subdued mood.
A key drag on the Nasdaq came from chipmakers, which saw renewed pressure after The Wall Street Journal reported that the U.S. government may move to revoke key export waivers. These waivers currently allow major semiconductor companies to continue doing business with Chinese firms using U.S.-origin technology. Nvidia (NVDA), one of the sector’s most closely watched names, fell by about 1.1% on the day.
Geopolitical jitters were also back in focus. On Thursday, the White House relayed that Trump has set a self-imposed two-week deadline to decide whether to authorize a military strike against Iran. The potential move has injected fresh volatility into an already fragile global backdrop. While the pause provides a possible opening for diplomacy, hopes for talks were quickly dashed as Iran’s president rejected any negotiations on Friday.
Nevertheless, European leaders are scrambling to defuse tensions. Foreign ministers from France, the UK, and Germany held emergency talks in Geneva with their Iranian counterpart, urging restraint and a return to dialogue.
Adding to the market’s uncertainty was a surprise shift in tone from the Federal Reserve. On Friday, Fed Governor Chris Waller suggested that rate cuts could be on the table as soon as July. Waller noted that inflation has remained soft in recent months, despite the economic noise stirred by Trump’s renewed tariffs.
The Fed held rates steady earlier this week, and Chair Jerome Powell reiterated that the central bank needs more evidence of slowing inflation before moving to ease policy. Powell’s cautious tone drew another sharp rebuke from Trump, who has repeatedly pressured the Fed to move faster to lower rates.
Still, Waller’s remarks nudged market expectations slightly. According to CME Group’s FedWatch Tool, traders modestly increased bets on a July rate cut, though the bulk of expectations remain centered around a move in September.
Overall, markets remain caught in a waiting game. Investors are balancing cautious optimism over potential monetary easing with the very real risks posed by escalating global conflicts and unpredictable political decisions. With earnings season approaching and geopolitical fault lines widening, the coming weeks promise more turbulence ahead.
Hii