US stocks ended mixed on Friday after President Donald Trump stated he is prepared to take more severe military action against Iran, though he has not yet decided on a major strike. He noted that Iran has become more serious in negotiations over time, is not in a hurry to reach a deal, and will monitor the progress of talks.
At the close, the Dow Jones Industrial Average rose 235.37 points, or 0.46%, to 51,947.02. The Nasdaq Composite fell 161.87 points, or 0.64%, to 24,975.82. The S&P 500 added 3.68 points, or 0.05%, to 7,411.98. Memory chip stocks weakened, with SanDisk Corp (SNDK.US) dropping 10.79%, SK Hynix (SKHY.US) falling 8.81%, and Micron Technology (MU.US) declining 6.99%. The Philadelphia Semiconductor Index shed 4.25%, with Intel Corp (INTC.US) down 7.89%. IBM Corp (IBM.US) gained 3.64%, and Apple Inc (AAPL.US) rose 3.53%. The Nasdaq Golden Dragon China Index slipped 0.68%, with Alibaba Group Holding Ltd (BABA.US) down 1.67% and Baidu Inc (BIDU.US) falling 1.91%.
European markets closed higher. Germany's DAX 30 advanced 396.05 points, or 1.60%, to 25,105.38. The UK's FTSE 100 rose 100.23 points, or 0.94%, to 10,739.40. France's CAC 40 added 73.19 points, or 0.88%, to 8,372.28. The Euro STOXX 50 index gained 71.98 points, or 1.16%, to 6,282.15. Spain's IBEX 35 climbed 322.83 points, or 1.68%, to 19,589.83. Italy's FTSE MIB index rose 495.16 points, or 0.96%, to 51,811.00.
Asian markets were weaker. Japan's Nikkei 225 index fell 2.73%, and South Korea's KOSPI index dropped 5.72%.
The US dollar index, a measure of the greenback against six major peers, edged up 0.02% to 101.468. The euro traded at $1.1370, down from $1.1377. The British pound was at $1.3326, up from $1.3318. Against the Japanese yen, the dollar fetched 163.84, up from 163.80. The dollar was at 0.8182 Swiss francs, up from 0.8169, and at C$1.4096, up from C$1.4076. Against the Swedish krona, the dollar was at 9.7158, down from 9.7663.
Bitcoin fell over 1.5% to $64,180, while Ethereum dropped over 1.2% to $1,859.64.
Oil prices declined. Light crude oil for September delivery on the New York Mercantile Exchange fell $2.88 to settle at $89.31 a barrel, a loss of 3.12%. Brent crude for September delivery on the London ICE Futures Exchange dropped $3.91 to close at $96.78 a barrel, down 3.88%.
Precious metals were mixed. Spot gold rose 0.1% to $4,053.15 an ounce, while spot silver gained 0.96% to $58.202 an ounce.
US New Home Sales Rebounded for the First Time in Three Months
In June, US new home sales rose for the first time in three months, as developers slashed prices to offset high mortgage rates and weak consumer confidence. The annualized sales rate increased 1.6% from the previous month to 628,000 units, surpassing the estimate of 607,000 units. The median sales price fell 2.7% year-over-year to $398,300, marking the fifth decline in six months. The improvement in sales may reflect significant discounts, as developers continue to offer promotions and price cuts to stimulate sluggish demand.
Pakistan is Exploring Ways to Restart US-Iran Talks
According to three Pakistani sources, Pakistan is exploring ways to restart negotiations between the US and Iran to end the nearly five-month-long conflict. The sources said that exploratory talks were held during a visit to Islamabad this week by Iran's Interior Minister, Eskandar Momeni, his second trip in the past 10 days. Momeni, who is considered close to the Islamic Revolutionary Guard Corps, met with Pakistani government leaders and military chief Asim Munir. The three sources cautioned that the obstacles to negotiating with the US remain high.
Transit Through Strait of Hormuz Declines, While Bab el-Mandeb Recovers
Kepler, an international market services firm, reported on social media Friday that traffic through two key Middle Eastern sea lanes diverged on July 23. Transits through the Strait of Hormuz fell sharply, while the Bab el-Mandeb strait, connecting the Red Sea and the Gulf of Aden, saw a recovery. Kepler data showed six vessels completed transits through the Strait of Hormuz on July 23, a 60% decline from the previous day. Except for one ship, all used channels designated by Iran. Meanwhile, 49 vessels transited the Bab el-Mandeb, higher than recent levels, including four ships that had turned off their Automatic Identification Systems (AIS) for "dark sailing." Kepler stated that some vessels that had previously turned back in the Gulf of Aden and Red Sea due to security risks have resumed navigation and completed transits, but others remain on standby after turning around. International shipping companies are still assessing the regional security situation, with overall activity characterized as "cautious but selectively resuming."
Trump Threatens High Tariffs on the EU, Demands Repeal of Fines on US Companies
President Trump stated that the European Union is again targeting great American companies without reason, citing fines against Apple, Meta, Amazon, and Google. He declared that the US is not Europe's "piggy bank" and will not allow it to become one. Trump announced the immediate launch of a Section 301 investigation into what he called the "looting" of US companies, harming American taxpayers. He warned that the EU will pay a very high price for what he described as illegal and highly discriminatory behavior, expecting high tariffs to be imposed in the shortest possible time, with the fines being fully revoked.
ECB Chief Economist Lane: September Will Be the Next Key Juncture for Interest Rate Policy
European Central Bank Chief Economist Philip Lane stated that the ECB will reassess and potentially adjust its policy stance in September, with rate decisions continuing to be data-dependent. He described the current situation as a "medium-sized shock" and noted that whether policy is adjusted in September largely depends on whether oil and gas prices remain high or if a sustainable solution to reopen Strait of Hormuz supply is found. The ECB had previously held interest rates steady to assess the impact of the Middle East conflict on Eurozone inflation and economic growth. Lane also said that the European economy is primarily supported by domestic demand, and that the US is not the dominant factor in international trade.
Paramount and Warner Bros. Discovery $111 Billion Merger Paused
Paramount Global (PSKY.US) said Friday it has agreed to pause its $111 billion merger with Warner Bros. Discovery Inc (WBD.US) until at least June of next year, pending a judge's ruling on a lawsuit by several US state attorneys general seeking to block the deal. Both sides stated in legal documents they have agreed to freeze the transaction, extending a shorter stay imposed earlier this week by a California federal judge. The deal would combine two major film studios, streaming services HBO Max and Paramount+, and networks like CBS and CNN under one roof. Paramount head David Ellison actively pursued the acquisition of Warner Bros., ultimately defeating Netflix after multiple rounds of higher bids.
Waymo Considers Ending Partnership with Uber as Competition Heats Up
According to a report, Alphabet's autonomous driving company Waymo is exploring options to exit its partnership with Uber Technologies Inc (UBER.US). Relations have deteriorated as the two tech companies engage in fierce lobbying competition over the future of the robotaxi industry. Multiple sources familiar with the matter said the autonomous vehicle company has held internal discussions about ending the collaboration that currently operates services in Austin and Atlanta. Uber stated in a statement that Waymo has informed the company of its plan to independently enter both markets starting in January 2028, as permitted by the contract. The companies first established their partnership in 2023, but the relationship has soured as they have become direct competitors in some markets and lobbied for regulatory policies favoring their own business while undermining the other.
SpaceX Stock Sell-off May Present an Opportunity, Morgan Stanley Analyst Bullish on AI Valuation
Morgan Stanley analysts said the sell-off in SpaceX (SPCX.US) shares has pushed the price to near a level where the market assigns zero value to the company's artificial intelligence business. Analyst Adam Jonas wrote in a note to clients on Friday that there is a disconnect between growing investor pessimism and the company's fundamentally unchanged business, creating an attractive opportunity to buy SpaceX stock. Jonas said many investors expect shares to potentially fall further to $100 each as the first stock lock-up period expires next month, allowing some insiders to sell. He believes that at this level, investors are effectively giving SpaceX's AI business zero or even negative valuation. The analyst has a $300 price target on SpaceX stock, with over 50% of the valuation coming from its AI business.
Analyst Actions
Rosenblatt Securities raised the price target for Intel Corp (INTC.US) from $65 to $80.
JPMorgan raised the price target for Raytheon Technologies Corp (RTX.US) from $215 to $240 and also raised the price target for Intel Corp (INTC.US) from $75 to $84.
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