United States benchmark averages ended mixed on Friday (Saturday AEST), with the S&P 500 and Nasdaq Composite closing at fresh record highs as a surge in semiconductor stocks offset ongoing geopolitical uncertainty tied to the Middle East.
The Dow Jones Industrial Average declined 79.6 points, or 0.2%, to 49,230.7, the S&P 500 advanced 56.7 points, or 0.8%, to 7,165.1, while the Nasdaq Composite jumped 398.1 points, or 1.6%, to 24,836.6.
For the week, the S&P 500 rose 0.6%, and the Nasdaq gained 1.5%, while the Dow posted a 0.4% loss.
Investor sentiment was initially supported by reports suggesting potential progress in United States-Iran diplomacy. According to reports, Iranian Foreign Minister Abbas Araghchi was expected to travel to Islamabad for talks with Pakistani mediators regarding a possible second round of negotiations with Washington.
However, developments over the weekend tempered optimism. U.S. President Donald Trump said he had cancelled plans to send special envoy Steve Witkoff and Jared Kushner to Pakistan after Iran’s chief negotiator departed Islamabad following discussions solely with Pakistani officials.
“Too much time wasted on traveling, too much work!” Trump wrote on Truth Social. “Nobody knows who is in charge, including them. Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”
Geopolitical tensions remained elevated following Trump’s earlier announcement that Israel and Lebanon had agreed to extend their ceasefire by three weeks after talks at the White House.
“The Meeting went very well!” Trump said in a separate post, adding that the U.S. would work with Lebanon to help it defend itself against Hezbollah.
The broader Middle East conflict has increasingly centred on the Strait of Hormuz, where a naval standoff between the U.S. and Iran has seen commercial vessels seized.
Trump also stated he had ordered the U.S. Navy to “shoot and kill any boat” laying mines in the strategic waterway.
Despite these tensions, equities were buoyed by strong gains in the semiconductor sector. Intel surged 23.65% to a record $82.57 after issuing a stronger-than-expected second-quarter revenue forecast, making it the top performer on the S&P 500.
Other chipmakers followed suit, with Advanced Micro Devices and Arm Holdings each climbing about 14%. NVIDIA gained 4.32%, also closing at a record as it approached US$5 trillion in market capitalisation.
In fixed income markets, yields declined, with the 10-year Treasury yield falling 0.4% to 4.306%, while the 2-year yield dropped 1.2% to 3.785%.
