US stock indexes opened mixed on Friday as investors weighed another record-setting session for the S&P 500 against renewed geopolitical tensions in the Middle East and awaited fresh economic data for clues on the Federal Reserve’s interest-rate path.
The S&P 500 opened slightly higher, while the Nasdaq Composite gained 0.16%.
The Dow Jones Industrial Average was mostly unchanged with a 17 point decline or 0.01% fall.
The cautious start followed a strong Thursday session in which the S&P 500 touched an intraday record high of 7,816.70 before closing at an all-time high.
Technology and communication services stocks led the gains, with both sectors rising about 1%.
The benchmark S&P 500 and the Nasdaq Composite are on track for a third consecutive week of gains.
Heading into Friday’s session, the S&P 500 was up 0.5% for the week, while the Nasdaq had gained 0.4%.
The Dow Jones Industrial Average, however, remained down about 0.4% on the week.
Earnings strength offsets economic concerns
Investor sentiment has remained supported by a strong second-quarter earnings season, with more than 90% of S&P 500 companies having reported results.
According to FactSet data, second-quarter earnings growth is tracking at roughly 50% compared with the same period a year earlier.
The strength in corporate earnings has helped sustain gains in US equities despite ongoing uncertainty over monetary policy and global geopolitical developments.
Technology shares have continued to outperform, particularly software companies.
The iShares Expanded Tech-Software Sector ETF has rebounded sharply over the past six months after a steep decline in the first quarter and gained more than 3% during Thursday’s session.
Investors also looked past weaker-than-expected July retail sales data, which showed an unexpected monthly decline.
Middle East tensions keep markets cautious
Despite easing inflation concerns earlier this week, investors remained cautious as geopolitical tensions in the Middle East continued to intensify.
Brent crude futures rose about 1% after reports indicated that shipping through the Strait of Hormuz had slowed significantly following fresh attacks on vessels.
The United States also indicated it could maintain a naval blockade of Iran indefinitely, raising concerns about global energy supplies.
Earlier in the week, both consumer and producer inflation data came in broadly in line with expectations, reducing concerns that the Federal Reserve would raise interest rates at its September meeting.
However, higher energy prices remain a key risk for inflation, prompting investors to continue monitoring developments in oil markets alongside incoming economic data.
Applied Materials falls despite strong outlook
Among individual stocks, Applied Materials fell more than 3% in trading despite forecasting fourth-quarter revenue above Wall Street estimates.
The decline reflected continued investor caution toward AI-related stocks, where markets have recently reacted negatively to any signs of moderating growth despite solid financial results.
Elsewhere, Reddit climbed more than 13% after being selected to join the S&P 500 index, effective Aug. 18.
Fox Corp. shares gained after JPMorgan upgraded the media company to an Overweight rating.
Drone manufacturers also advanced after President Donald Trump announced tariffs on imported drones and drone components.
Red Cat Holdings, Unusual Machines and AeroVironment all posted gains as investors assessed the potential impact of the proposed trade measures.
Overall, investors entered Friday balancing strong corporate earnings and easing inflation with persistent geopolitical uncertainty, while awaiting additional economic data that could shape expectations for Federal Reserve policy in the weeks ahead.
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