Rich Asplund
7 min read
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The S&P 500 Index ($SPX) (SPY) Friday closed down -0.22%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.43%. September E-mini S&P futures (ESU25) are down -0.21%, and September E-mini Nasdaq futures (NQU25) are down -0.40%.
Stock indexes on Friday gave up an early advance and finished mostly lower on weakness in chip makers after a report from The Wall Street Journal stated that a top US official had told top global semiconductor makers that the US might revoke waivers for allies with semiconductor plants in China.
Negative trade news also pressured stocks after the Financial Times reported that Japan had canceled a top-level trade meeting with the US, set for July 1, following a request from the Trump administration for Japan to increase its defense spending. Investors are bracing for more negative tariff news within the next week or so following President Trump's announcement last Wednesday that he intends to send letters to dozens of US trading partners within one to two weeks, setting unilateral tariffs ahead of the July 9 deadline that came with his 90-day pause.
Stocks initially moved higher on Friday, driven by a Reuters report that the Iranian government said it is ready to discuss limitations on its uranium enrichment.
Stocks were supported Friday by speculation that the US will give negotiations a chance before deciding to enter the Israel-Iran war, following the White House's announcement on Thursday that President Trump would decide within two weeks on any US involvement in the conflict, and there is still a "substantial chance" of a negotiated settlement.
Stocks also had support from dovish comments on Friday from Fed Governor Waller, who said, "I think we have room to bring interest rates down as early as July, and then we can see kind of see what happens with inflation."
Friday's US economic news was negative for stocks. The June Philadelphia Fed business outlook survey was unchanged at -4.0, weaker than expectations of an increase to -1.5. Also, the May index of leading economic indicators (LEI) fell -0.1% m/m, right on expectations, and the sixth consecutive month the LEI has declined.
Hostilities between Israel and Iran entered an eighth day Friday with no signs of easing. Israel struck more of Iran's nuclear and missile production sites Friday and warned it could bring down Iran's leadership. Meanwhile, Iran said it won't negotiate with the US while Israel's assault continues. Iranian President Pezeshkian said the only way to end the imposed war is to "unconditionally stop" the enemy's aggression. Iran showed no signs of backing down and reiterated an intention to respond with force if the US were to get directly involved in Israeli attacks.
