The S&P 500 finished little changed on Friday as weakness in semiconductor stocks offset early gains, while investors closely monitored the latest developments surrounding the Middle East conflict.
The benchmark S&P 500 edged up 0.05% to close at 7,411.98. The Nasdaq Composite slipped 0.64% to 24,975.82, pressured by losses in technology shares. Meanwhile, the Dow Jones Industrial Average rose 235.60 points, or 0.46%, to 51,947.25, supported by a 3.5% rally in Apple.
Markets initially traded higher after oil prices retreated on reports that Pakistan, with support from China, is exploring the possibility of facilitating new peace talks between the U.S. and Iran. However, sources indicated that significant hurdles remain before meaningful negotiations can begin.
Investor caution persisted after U.S. President Donald Trump said he is considering a major escalation in military action against Iran, describing a potential offensive as larger than any previous operation. Reports later indicated that Trump met with senior advisers to evaluate whether to expand U.S. military involvement.
Oil prices recovered part of their earlier losses as geopolitical uncertainty remained elevated. Brent crude settled at $96.78 per barrel, down nearly 4% after briefly trading above $100 earlier in the week, while West Texas Intermediate crude fell 3% to $89.31 per barrel.
With the possibility of further military escalation over the weekend, many traders avoided taking aggressive long positions.
Technology stocks remained under pressure despite stronger-than-expected quarterly results from Intel, whose shares dropped nearly 8% after reversing early gains. Broadcom fell 2.7%, AMD lost 3.3%, Micron Technology declined 7%, and the VanEck Semiconductor ETF (SMH) dropped 3%, weighing on the broader market.
For the week, the S&P 500 and Nasdaq recorded their second consecutive weekly declines, losing 0.6% and 2.1%, respectively. The Dow Jones Industrial Average slipped 0.4%, marking its third straight weekly loss.
Frequently Asked Questions
Why did the S&P 500 finish flat while the Dow gained?
The Dow was lifted by a strong rally in Apple shares, while the S&P 500 and Nasdaq were held back by sharp declines in semiconductor stocks, which carry significant weight in the broader market.
Why are investors closely watching the Middle East conflict?
Escalating geopolitical tensions can disrupt global oil supplies, drive energy prices higher, increase market volatility, and influence inflation and central bank policy expectations.
Why did chip stocks fall despite Intel's strong earnings?
Although Intel beat earnings expectations, investors focused on broader concerns such as slowing AI demand, valuation pressures, and sector-wide profit-taking, dragging down semiconductor shares.
What could move markets next week?
Key drivers include any escalation or peace developments in the Middle East, movements in oil prices, upcoming corporate earnings, and major U.S. economic data that could influence Federal Reserve expectations.
