U.S. stocks rose at midday Friday in a broad-based rally, with the Dow up around 0.5% and the S&P 500 gaining 0.4%, as a roughly 4% slide in oil prices cooled the inflation and rate-hike anxieties that had gripped markets all week.
The Wall Street Journal reported that Bahrain and Kuwait warplanes had struck sites inside Iran, and Iranian commanders issued fresh threats, even as Pakistan and Iran were said to be exploring a China-brokered path back to talks with Washington.
That was enough to spark a broad relief rally, although momentum began to fade into midday trading as uncertainty lingered and next week's Federal Reserve decision loomed.
Crude tumbled as the war premium deflated. West Texas Intermediate fell about 4.3% to near $88.25 a barrel, while Brent slid roughly 5% to around $95.65.
Energy Price Easing Ripples Into Rates
The yield on the 10-year Treasury note edged down about 4 basis points to 4.67%, pausing a four-session rally that had lifted the benchmark to its highest level since January 2025.
The 2-year yield slipped to 4.32%, and the 30-year eased to 5.15%.
The Nasdaq 100 fell 0.4% to 28,341, pressured by chip weakness and concerns over AI overspending among hyperscalers.
Rate-hike jitters nonetheless remained a backdrop. Ahead of next Wednesday's Federal Reserve meeting, markets were pricing roughly a 35% probability of a rate hike, with the odds of a September hike near 80%.
Flash S&P Global PMIs showed U.S. services activity accelerating to an eight-month high while price pressures intensified.
Gold was up about 0.5%, while silver climbed a firmer 2.2%.
Friday's Performance In Major US Indices
According to market data:
- The Vanguard S&P 500 ETF (VOO) gained 0.4%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.5%.
- The Invesco QQQ Trust (QQQ) slipped 0.4%.
- The iShares Russell 2000 ETF (IWM) advanced 0.2%.
Rate-Sensitives And Airlines Fly, AI Chips Get Grounded
The rally was led by rate-sensitive corners of the market. The Real Estate Select Sector SPDR Fund (XLRE) topped all sectors with a 2.2% gain as yields eased, followed by the Materials Select Sector SPDR Fund (XLB), up 1.0%.
Consumer staples, health care and communications each rose about 0.8%. Technology was the lone decliner, with the Technology Select Sector SPDR Fund (XLK) off 0.4% on the chip selloff.
Cheaper crude and lower yields powered the day's biggest industry moves. The U.S. Global Jets ETF (JETS) surged 3.5% as falling fuel costs lifted airlines, while the iShares U.S. Home Construction ETF (ITB) climbed 2.3% on the drop in mortgage-sensitive rates.
Energy-linked industries held up better than crude, with the VanEck Oil Services ETF (OIH) up 2.5% on strong sector earnings even as the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) dipped 0.4%.
Earnings Drive Standout Single-Stock Moves
Digital Realty Trust Inc. (DLR) jumped 13.5% after the data-center REIT reported strong quarterly results.
Booz Allen Hamilton Holding Corp. (BAH) rose 11.2%. Oil-field giant SLB (SLB) gained 10.1%, helping explain the resilience in oil-services names, while SS&C Technologies Holdings Inc. (SSNC) rose about 10%.
In health care, Tenet Healthcare Corp. (THC) soared 17.1% amid strength in hospital operators after HCA Healthcare Inc. (HCA) topped estimates. RingCentral Inc. (RNG) spiked 23.9% and Fermi Inc. (FRMI) rose 16.7%.
On the Downside
Optical and AI-connectivity chipmakers bore the brunt of the AI-spending worries.
Astera Labs Inc. (ALAB) fell 8.8%, Credo Technology Group Holding Ltd (CRDO) lost 8.7%, Coherent Corp. (COHR) dropped 8.3%, and Applied Optoelectronics Inc. (AAOI) slid 8.1%, all caught in the AI-infrastructure retreat.
Among other reporters, American Express Co. (AXP) tumbled 5.6%, the worst Dow performer, after its second-quarter results disappointed, while Verizon Communications Inc. (VZ) rose about 2% on a subscriber-growth beat. Intel Corp. (INTC) slipped about 1% despite posting its fastest revenue growth in 17 years.
Chip sentiment also drew attention after Qualcomm Inc. (QCOM) told customers it would raise prices by a double-digit percentage, saying it "can no longer absorb increasing costs."
Friday's Russell 1000 Top Gainers
Friday's Russell 1000 Top Losers
