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US stocks closed mixed on Friday, with the Dow Jones Industrial Average and S&P 500 ending lower while the Nasdaq Composite posted gains, as investors remained cautious ahead of the weekend and monitored ongoing Middle East peace negotiations.
The Dow fell 269.23 points, or 0.56%, while the S&P 500 slipped 0.11%. The Nasdaq rose 0.35% to close at 22,901.06, supported by strength in semiconductor stocks.
Despite the mixed finish, all three major indexes posted solid weekly gains, with the S&P 500 rising more than 3% and the Nasdaq on track for gains exceeding 4%.
Geopolitical uncertainty keeps investors cautious
Markets remained sensitive to developments surrounding the fragile two-week ceasefire between the United States and Iran.
The truce has been strained by reported violations, including continued Israeli strikes on Lebanon, even as Israeli Prime Minister Benjamin Netanyahu signaled openness to direct talks with Beirut.
The Strait of Hormuz, a critical artery for global oil shipments, remained largely closed, with Iran demanding a ceasefire in Lebanon and the release of frozen assets as conditions for further negotiations.
Donald Trump added to tensions by accusing Iran of “short term extortion of the World by using International Waterways,” stating its leaders “don’t seem to realize they have no cards” and that “the only reason they are alive today is to negotiate!”
Investor caution was particularly evident heading into the weekend, with concerns about potential developments while markets are closed.
Inflation data highlights energy-driven pressures
Economic data released during the session underscored the inflationary impact of the ongoing conflict. The Labor Department’s Consumer Price Index showed prices rose 3.3% annually in March, in line with expectations, with a sharp increase in energy costs driving the gains.
Gasoline prices surged 21.2%, contributing to the largest monthly rise in consumer prices in nearly four years. On a monthly basis, CPI rose 0.9%.
Core inflation, which excludes food and energy, was more subdued. Core CPI increased 0.2% for the month and 2.6% annually, coming in below expectations.
Still, rising energy prices have heightened concerns about future inflation.
A University of Michigan survey showed consumer sentiment falling to a record low, with inflation expectations rising to 4.8% over the next year.
San Francisco Fed President Mary Daly said the oil shock from the Iran war would delay progress toward the Federal Reserve’s 2% inflation target.
Tech strength offsets broader market weakness
Technology stocks helped support the broader market, with chipmakers leading gains and the semiconductor index hitting a record high.
US-listed shares of Taiwan Semiconductor Manufacturing rose after the company reported better-than-expected first-quarter revenue.
AI infrastructure names also saw strong momentum. Shares of CoreWeave surged after announcing a multi-year agreement with Anthropic.
Meanwhile, financial stocks lagged ahead of major US bank earnings next week, which mark the unofficial start of the first-quarter reporting season.
Analysts expect aggregate S&P 500 earnings growth of 13.9%, according to LSEG.
As geopolitical risks, inflation pressures, and corporate earnings outlooks converge, markets remain poised for continued volatility in the near term.
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