Stock Market Update

[BRIEFING.COM] The stock market finished the week on a poor note as concerns about further weekend escalation in tensions between Israel and Iran won over the fear of missing out on further upside in equities. The S&P 500 lost 1.1%, surrendering 0.4% for the week while the Russell 2000 (-1.9%; -1.5% for the week) and Dow (-1.8%; -1.5% for the week) underperformed.

Equities started Friday with losses after Israel struck Iranian nuclear facilities overnight. The attack prompted a spike in the price of oil while stocks started lower but spent the first half of the session in a steady rise, making for a continuation of this week's honey badger-like resilience.

The S&P 500 recovered more than half of its initial loss in morning trade but eventually fell prone to renewed selling pressure amid signs that the conflict in the Middle East is likely to escalate over the weekend. To that end, President Trump called on Iran to return to nuclear talks or face additional aggression from Israel, but CNBC reported in the early afternoon that Iranian officials no longer plan to attend nuclear talks that were scheduled for Sunday. A bit later, Iran fired a salvo of missiles toward Israel, giving the market little hope for de-escalation over the next couple days.

Ten sectors finished the day in negative territory with financials (-2.1%) and technology (-1.5%) finishing at the bottom of today's leaderboard. Payment processors like Visa (V 352.85, -18.55, -5.0%), PayPal (PYPL 70.83, -3.98, -5.3%), and Mastercard (MA 562.03, -27.25, -4.6%) paced the selling in financials on concerns that they could lose some business if retail giants Amazon (AMZN 212.10, -1.14, -0.5%) and Walmart (WMT 94.44, -0.39, -0.4%) issue stablecoins, which could happen in the near future, according to The Wall Street Journal.

The technology sector struggled with chipmakers leading the weakness as participants rushed to lock in profits after a strong week. The PHLX Semiconductor Index lost 2.6% today but still finished the week with a gain of 1.5%. Most other tech components also settled in the red, while solar names like Enphase Energy (ENPH 45.60, +0.91, +2.0%) and First Solar (FSLR 175.12, +7.29, +4.3%) bucked the weakness. The poor showing from the sector masked a continuation of yesterday's post-earnings rally in Oracle (ORCL 215.22, +15.36, +7.7%), which reached a fresh record high.

Select defense stocks like Northrop Grumman (NOC 516.72, +19.59, +3.9%) and Lockheed Martin (LMT 486.45, +17.18, +3.7%) also displayed relative strength, but the iShares U.S. Aerospace & Defense ETF (ITA 180.22, +0.75, +0.4%) finished the day with just a slim gain.

The energy sector (+1.7%) outperformed throughout the day, extending this week's advance to 5.7% as crude oil jumped $5.12, or 7.5%, to $73.16/bbl, ending the week with a gain of $8.57, or 13.3%.

Treasuries spent the session in a steady retreat from a slightly higher open as the rising price of oil led to concerns about accelerating inflation. The 10-yr yield rose seven basis points to 4.42% as today's developments took precedence over the preliminary reading of the University of Michigan's Consumer Sentiment Index for June (60.5; Briefing.com consensus 53.0), which showed a drop in year-ahead inflation expectations to 5.1% from 6.6%.

Monday's economic data will be limited to the 8:30 ET release of the Empire State Manufacturing survey for June (Briefing.com consensus -6.6; prior -9.2).

• S&P 500 +1.6% YTD
• Nasdaq Composite +0.5% YTD
• Dow Jones Industrial Average -0.8% YTD
• S&P Midcap 400 -3.7% YTD
• Russell 2000 -5.8% YTD

[BRIEFING.COM] The S&P 500 trades lower by 1.2% going into the final 30 minutes of the session ahead of a weekend that will be marred by uncertainty surrounding the evolution of the conflict between Israel and Iran.

The market did its best to resist selling efforts through the day but ultimately gave in to renewed selling due to a lack of encouraging signals that would foreshadow a de-escalation of the conflict in the coming days.

Market breadth has worsened since this morning with 4.3 NYSE listings trading lower for each advancer while the Nasdaq is also seeing 4.3 listings trading lower for each advancer.

Treasuries finished the day with losses, sending the 10-yr yield higher by seven basis points to 4.42%, though it ended the week nine basis points below last Friday's settlement.

[BRIEFING.COM] The S&P 500 (-1.1%) has slumped to a fresh session low as the weekend nears with no sign of de-escalation between Israel and Iran. Instead, the market received signs of an escalation in the conflict, as CNBC reported in the early afternoon that Iranian officials no longer plan to attend nuclear talks with the U.S. on Sunday, followed by recent reports of Iran firing missiles toward Israel.

The market had shown resilience in early trade, but the recent news flow has invited concerns that the conflict could worsen over the weekend. As a result, ten out of eleven sectors are back in the red while energy (+1.7%) remains firmly in the green.

Treasuries are on course to finish the day with losses, sending the 10-yr yield up six basis points to 4.42%.

[BRIEFING.COM] The markets are reeling, the S&P 500 (-1.07%) near lows of the day, amid reports that Iran has commenced firing projectiles into Israeli airspace.

Briefly, S&P 500 constituents Monolithic Power (MPWR 675.02, -43.55, -6.06%), Apollo Global Management (APO 131.53, -6.58, -4.76%), and PayPal (PYPL 71.18, -3.63, -4.85%) pepper the bottom of the standings. MPWR, along with fellow semiconductor stocks, weaken on Friday amid profit taking in high-beta names following a strong run. Meanwhile, China's continued dominance in rare earths highlights lingering supply chain risks that could weigh on the sector longer-term. For its part, PYPL's weakness reflects fears that it could lose a slice of future payment volume to blockchain-based alternatives.

Meanwhile, CF Industries (CF 99.68, +5.85, +6.23%) is one of today's better performers.

[BRIEFING.COM] With about two hours to go on Friday the tech-heavy Nasdaq Composite (-0.62%) hosts the shallowest daily losses while at the same time jockeying for position at the top of the weekly leaderboard.

Gold futures settled $50.40 higher (+1.5%) at $3,452.80/oz, and +3.2% on the week, as escalating geopolitical tensions in the Middle East, sparked by Israel's airstrike on Iran's nuclear facilities and retaliatory drone threats, drove a wave of safe-haven buying. Markets were also buoyed by soft U.S. inflation and labor data, reinforcing expectations of earlier Federal Reserve rate cuts, likely in September, which underpinned risk-off flows into precious metals. Weekly gains were propelled by a mix of Middle East flareups, a softer U.S. dollar, and persistent trade-deal uncertainty between the U.S. and China.

Meanwhile, the U.S. Dollar Index is up +0.3% to $98.14.