The S&P 500 Index ($SPX) (SPY) closed up by +0.43% on Friday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.98%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +0.33%. E-mini S&P futures (ESU26) rose +0.37%, and September E-mini Nasdaq futures (NQU26) rose +0.27%.
Stock indices settled higher on Friday as crude oil prices stabilized, temporarily easing inflation concerns. Crude oil prices consolidated below Thursday’s 1-month high on Friday on comments from Iranian President Masoud Pezeshkian, who called for an end to the US-Iran war. Markets await Monday’s press conference, when US Treasury Secretary Bessent said the administration would give details on plans to isolate Iran’s economy.
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Cryptocurrency-exposed stocks led gainers in the broader market on Friday as Bitcoin soared to a 3-month high. Bitcoin (^BTCUSD) rose more than +6% on Friday to a 3-month high and has rallied more than +20% this week. Institutional buying returned to support Bitcoin this week after the US Treasury announced it would at least double its long-dated bond buybacks, sparking a massive, short-covering rally in cryptocurrencies. According to data from Coinglass, over $2 billion in short Bitcoin positions in the perpetual futures market have been liquidated since Wednesday.
Some mild weakness in chipmakers and AI-infrastructure stocks on Friday limited gains in the Nasdaq 100. Also, higher bond yields were a drag on the broader market on Friday, as the 10-year T-note yield rose +3 bp to 4.73%.
US economic news on Friday was mixed for stocks. The US Aug S&P manufacturing PMI fell -0.7 to 53.2, weaker than expectations of no change at 53.9, but the Aug S&P services PMI unexpectedly rose +2.8 to 56.8, stronger than expectations of a decline to 54.0 and the fastest pace of expansion in 4.5 years.
The lack of a clear path to a resolution in the Middle East is keeping the Strait of Hormuz closed and limiting crude supplies from the Middle East, keeping upward pressure on oil prices. Oct WTI crude oil prices (CLV26) settled slightly higher on Friday, although gains were limited due to comments from Iranian President Masoud Pezeshkian, who said, “It would be better to end the war today, now that we are strong and have dignity, with the whole world acknowledging our victory.” Crude prices soared to a 1-month high on Thursday after President Trump threatened Iran and its trading partners with economic isolation. Mr. Trump said any country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face tremendous consequences. Treasury Secretary Bessent said the administration will announce its plan to isolate Iran and its trading partners on Monday.
President Trump said he’s not interested in extending the expired agreement with Iran, dimming prospects for a swift reopening of the Strait of Hormuz. Mr. Trump also said that the US naval blockade on Iranian ports is putting pressure on the country, and he has no timeline for resolving the US-Iran conflict.
On Monday, US Energy Secretary Chris Wright said that the US is playing the long game with Iran, implying the US has no plans to de-escalate the conflict, potentially limiting crude supplied from the Middle East.
There have been no signs of progress toward a US-Iran agreement to fully open the Strait of Hormuz. An Iranian military spokesperson said last Thursday that no ship can safely pass the Strait of Hormuz without Iran’s authorization and supervision and that President Trump’s claims of control over the Strait are “nothing more than lies.” The Iranian statement was in response to President Trump’s comment last Tuesday that the US has “total control over the Hormuz Strait” and that “we own it.”
The outlook for strong Q2 earnings is a bullish factor for stocks. The S&P 500 is tracking for earnings growth of almost 32% in Q2, well above projections of +23%, and nearly four times the average earnings growth rate outside of the Covid period since Q4 of 2013, according to Bloomberg Intelligence. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2. So far, earnings results have been positive, with 86% of the 468 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data.
The markets are discounting a 39% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Friday. The Euro Stoxx 50 closed up +0.63%. China’s Shanghai Composite closed up +0.04%. Japan’s Nikkei-225 Stock Average closed down -0.30%.
Interest Rates
September 10-year T-notes (ZNU6) closed down by -7.5 ticks on Friday. The 10-year T-note yield rose +3.2 bp to 4.736%. T-notes were under pressure on Friday from a rally in stocks, which curbed safe-haven demand for T-notes. Also, Friday’s report showing the Aug S&P services PMI unexpectedly expanded at its fastest pace in 4.5-years shows strength in the US economy and weighed on T-notes.
European government bond yields are moving lower today. The 10-year German bund yield fell -0.1 bp to 3.258%. The 10-year UK gilt yield fell -0.7 bp to 5.060%.
The Eurozone Aug S&P manufacturing PMI unexpectedly rose +0.9 to 52.8, stronger than expectations of a decline to 51.8 and the fastest pace of expansion in 4.25 years. Also, the Aug composite PMI unexpectedly rose +0.1 to 52.1, stronger than expectations of a decline to 51.7.
ECB July 1-year CPI expectations eased to 2.9% from 3.0% in June. The 3-year July CPI expectations eased to 2.7% from 2.8% in June.
The Eurozone Aug consumer confidence index unexpectedly rose +0.4 to a 6-month high of -15.5, stronger than expectations of a decline to -16.0.
UK July retail sales ex-auto fuel fell -0.9% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 14 months.
Markets are discounting a 95% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.
US Stock Movers
Cryptocurrency-exposed stocks soared on Friday as Bitcoin (^BTCUSD) extended this week’s sharp rally, climbing more than +6% to a 3-month high. Coinbase Global (COIN) closed up more than +7%, and Strategy (MSTR) closed up more than +6% to lead gainers in the Nasdaq 100. Also, Circle Internet Group (CRCL) closed up more than +5%.
Mining stocks rallied on Friday after copper, gold, and silver prices rose sharply. Southern Copper (SCCO) closed up more than +8%, and Freeport-McMoRan (FCX) closed up more than +7%. Also, Anglogold Ashanti (AU) closed up more than +6%, and Newmont Corp (NEM) and Barrick Mining (B) closed up more than +3%.
Some chipmakers and AI-infrastructure stocks fell on Friday, limiting gains in the broader market. Marvell Technology (MRVL) closed down more than -5% to lead losers in the S&P 500 and Nasdaq 100. Also, Applied Materials (AMAT), Advanced Micro Devices (AMD), ARM Holdings Plc (ARM), Intel (INTC), and Lam Research (LRCX) are down more than -2%. In addition, KLA Corp (KLAC), Western Digital (WDC), Micron Technology (MU), and Seagate Technology Holdings Plc (STX) are down more than -1%.
Utility stocks fell on Friday as T-note yields rose. Sempra (SRE) closed down more than -5%, and Edison International (EIX) closed down more than -4%. Also, American Electric Power (AEP), CenterPoint Energy (CNP), and Xcel Energy (XEL) closed down more than -3%, and Exelon (EXC), Public Service Enterprise Group (PEG), and Duke Energy (DUK) closed down more than -2%.
Moderna (MRNA) closed up more than +8%, and Merck & Co (MRK) closed up more than +2% on positive carryover from Wednesday, when the companies reported that their cancer vaccine combined with Keytruda helped cut the recurrence of melanoma in a large, late-stage trial.
Parsons Corp (PSN) closed up more than +6% after Baird upgraded the stock to outperform from neutral with a price target of $57.
Tesla (TSLA) closed up more than +5% after Nevada’s Transportation Authority approved up to 5,000 Tesla autonomous vehicles for the first 12 months to provide paid passenger rides in Clark County.
Ross Stores (ROST) closed up more than +4% after reporting Q2 sales of $6.26 billion, better than the consensus of $6.16 billion, and raised its 2027 EPS forecast to $8.61 to $8.77 from a previous forecast of $7.50 to $7.74.
Teradyne (TER) closed down more than -2% after Baird downgraded the stock to neutral from outperform.
Earnings Reports (8/24/2026)
Napco Security Technologies (NSSC).
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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