U.S. Stocks Edge Lower as Investors Digest Data, Earnings Outlook; Dollar and Yields Fall
U.S. equity markets slipped slightly on Friday, following Thursday’s record-setting gains for both the S&P 500 and Nasdaq, as investors turned their attention to upcoming corporate earnings and mixed economic data. Meanwhile, the U.S. dollar softened and Treasury yields declined.
The University of Michigan’s latest consumer sentiment survey showed an improvement in July confidence levels and a drop in inflation expectations, although households still perceive a meaningful risk of rising prices ahead.
Elsewhere, separate data revealed that single-family housing starts fell to their lowest level in 11 months in June. Higher mortgage rates and persistent economic uncertainty continue to weigh on homebuying, suggesting residential investment may have contracted again in Q2.
Thursday’s upbeat reports on retail sales and jobless claims hinted at a modest uptick in economic momentum, helping fuel the previous day’s rally.
Earnings in Focus as Options Expiry Approaches
Investors are increasingly focused on corporate earnings, especially as the July equity options expiration nears. According to Bruce Zaro, managing director at Granite Wealth Management, “Today’s action is all about option expiration… Investors are positioning ahead of earnings season, especially among growth and tech names.”
Zaro added that strong performance among megacap stocks is creating FOMO—the fear of missing out—among market participants.
Positive early results from major firms like Netflix (NASDAQ:NFLX) have helped support sentiment. Eren Osman, wealth management head at Arbuthnot Latham, said he remains “pretty constructive” on the U.S. macro backdrop, citing strong corporate performance.
Next week, investors will be watching earnings from tech giants Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) to further assess market direction.
Major Index Movements (as of 11:12 a.m. ET)
- Dow Jones Industrial Average: -173.00 points (-0.39%) to 44,310.88
- S&P 500: -3.55 points (-0.05%) to 6,293.90
- Nasdaq Composite: -8.68 points (-0.03%) to 20,878.31
Globally, the MSCI World Index rose 0.17% to 927.86, while the STOXX 600 in Europe remained flat.
Currency and Bond Market Movements
The U.S. dollar edged lower on Friday, though it remains on course for a weekly gain, as investors assess how tariff-driven inflation risks and pressure from President Donald Trump on Fed Chair Jerome Powell might influence policy.
- Dollar Index: -0.28% to 98.23
- Euro: +0.51% to $1.1654
- British Pound: +0.23% to $1.3446
- USD/JPY: -0.15% to 148.37, as political uncertainty looms in Japan ahead of Sunday’s upper house election, where Prime Minister Shigeru Ishiba’s coalition may lose its majority.
In Treasury markets:
- 10-year yield: down 3 bps to 4.434%
- 30-year yield: down 1 bp
- 2-year yield: fell 4.8 bps to 3.869%
On Thursday, Fed Governor Christopher Waller reiterated his support for a rate cut by month-end, though most Fed officials have recently expressed a preference for keeping rates unchanged for now.
Commodities: Oil and Gold
Crude oil prices rose Friday as markets reacted to new EU sanctions targeting Russia, reinforcing concerns about supply.
- U.S. crude: +0.53% to $67.91 per barrel
- Brent crude: +0.45% to $69.83 per barrel
- Gold prices also rose, supported by a weaker dollar and geopolitical uncertainty, while platinum eased slightly after touching a decade-high earlier this week.
- Spot gold: +0.5% to $3,355.34 an ounce
