Stock market today: S&P 500 in weekly loss as trade war fears intensifyy
Investing.com -- U.S. stocks ended mixed on Friday as investors kept a close eye on developments in the Middle East and weighed the Federal Reserve’s outlook on interest rates.
The S&P 500 slipped 0.22% to finish at 5,967.84, logging its third straight daily decline. The Nasdaq Composite fell 0.51% to 19,447.41, while the Dow Jones Industrial Average edged up 35.16 points, or 0.08%, to close at 42,206.82.
For the week, the S&P 500 posted a modest decline of 0.2%. The Dow ended nearly flat with a slight 0.02% gain, and the Nasdaq rose 0.2%.
Markets are facing another test on Monday after a U.S. strike on Iran over the weekend raised fears of retaliation and surging oil prices.
The focus has shifted sharply to geopolitical risks, with investors sidelining upcoming U.S. economic data to gauge how President Donald Trump’s military move might affect inflation, interest rates, and market sentiment.
Trump described the strike as "a spectacular military success" and claimed Iran’s nuclear facilities had been "obliterated." He warned further action could follow if Iran refuses to pursue peace.
In response, Tehran vowed “everlasting consequences” and ramped up attacks on Israel.
Despite recovering from an early-April dip, the S&P 500 remains 2.7% below its February closing peak and has not broken to new highs in 27 sessions.
Meanwhile, the Federal Reserve kept interest rates unchanged last week and maintained its projection for rate cuts this year, though policymakers now anticipate a slower pace of easing, citing inflation pressures from Trump’s tariff plans.
In addition to geopolitical concerns, investors will watch this week’s economic releases, including Monday’s housing and business activity data, Tuesday’s consumer confidence figures, and Friday’s PCE Price Index.
"Remember, the survey-based data all got crushed in the March, April, May time frame ... my expectation is we’re still going to see an improvement," Mark Hackett, chief market strategist at Nationwide, said prior to the U.S. strike on Iran.
Nike , Micron, FedEx (NYSE:FDX) earnings on tap
While geopolitical tensions and key economic data are expected to dominate investor attention this week, several major earnings reports will also be in the spotlight.
Sportswear titan Nike’s (NYSE:NKE) upcoming results will be closely watched for any insights into how ongoing tariff uncertainty is affecting its business.
Chipmaker Micron Technology (NASDAQ:MU) is set to report as well, following its recent announcement of expanded investment in U.S. operations.
Earnings are also on tap from software company BlackBerry (NYSE:BB) and parcel delivery heavyweight FedEx.
According to RBC Capital Markets, the markets are heading into the second-quarter reporting season with a strong foundation of earnings performance.
“What we’ve been paying the most attention to on the earnings front is our favorite gauge of earnings sentiment – the rate of upward EPS estimate revisions – which fell to typical non-crisis lows for the S&P 500 in April, and has now rebounded to 55%, a level that’s not back to post crisis highs,” the broker said in a note.
“The recovery that’s already happened makes us somewhat concerned that this stat is about as good as it gets for 2025,” it added.
What analysts are saying about U.S. stocks
Evercore ISI: Despite the near term uncertainty, the AI-driven structural bull market has further to run. The four elements that end bull markets – Recession, an Uncooperative (Hiking) Fed, Spiking long dated bond yields, and FOMO/overvaluation accompanied by a vigorous Capital Markets cycle – are all absent. Yet with EVR ISI Strategy’s base case a correction of the near vertical rally from April – consistent with SPX YE 2025 PT 5,600 – steps can be taken to position to buy low, sell high and stay invested.”
Jefferies: “GREED & fear points out passive flows exert $5 impact on equity market for each dollar invested, potentially 20x in case of Tech. The market has seen inflows of $11B into leveraged funds.”
“This is the scary reality of the current U.S. stock market. This is why the issue of whether Big Tech will be able to monetize its prodigious spending on the AI arms race is at least as important for the U.S. market than the state of the economy given Big Tech’s continuing dominance of the S&P500.”
Speaking about the latest U.S.-Iran conflict, RBC Capital Markets said: “It has been and remains our belief that the longer and broader the conflict becomes, the more challenging it could be for US equities. These escalations come at a tricky time for U.S. equities, as the S&P 500 has looked fairly valued to us (perhaps a bit overvalued) from a fundamental perspective with more room to run from a sentiment perspective.”