Wall Street Posts Mixed Trading as Investors Monitor Middle East Diplomatic Developments Ahead of Weekly Gains

US Stocks Mixed as Geopolitics Dominate Market

April 10, 2023

U.S. stocks were mixed on Friday, with investors taking a cautious approach as they headed into the weekend and kept a close eye on the ongoing Middle East peace negotiations. The fragile two-week truce has been threatened by claimed violations of the ceasefire, including Israel's continued bombardment of Lebanon, while Iran has demanded a ceasefire in Lebanon and the unfreezing of assets as a condition to resuming negotiations.

The S&P 500 and the Dow were modestly lower, while tech stocks held the Nasdaq aloft as investors assessed the unfolding developments in the Middle East. The Strait of Hormuz remained closed by Iran, and the week began on an ominous note, with U.S. President Donald Trump threatening to destroy "an entire civilization" if Iran failed to comply with his demands.

Despite the geopolitical tensions, the week ended on a positive note, with all three indexes on track to score their largest Friday-to-Friday percentage gains since November. The Dow Jones Industrial Average fell 274.88 points, or 0.57%, to 47,912.20, while the S&P 500 lost 11.41 points, or 0.17%, to 6,813.24. The Nasdaq Composite, however, gained 46.00 points, or 0.20%, to 22,868.84.

The Labor Department's consumer price index (CPI) showed consumer prices logging their largest monthly jump in nearly four years due to an expected spike in energy prices, which prompted a 21.2% surge at the gasoline pump. Core CPI, which strips out food and energy, was cooler than analysts anticipated. This news, combined with the ongoing geopolitical tensions, contributed to a record low in consumer sentiment, as reported by the University of Michigan.

| Index | Weekly Gain | Previous Week's Gain | | --- | --- | --- | | Dow Jones Industrial Average | -0.57% | N/A | | S&P 500 | -0.17% | N/A | | Nasdaq Composite | 0.20% | N/A |

The tech sector led the gainers, with chipmakers touching a record high. Broadcom and Nvidia advanced 5.3% and 2.6%, respectively. Financial stocks, however, underperformed ahead of major U.S. banks posting earnings next week, marking the unofficial start of first-quarter reporting season. Analysts currently predict aggregate year-on-year S&P 500 earnings growth of 13.9%, according to LSEG.

U.S.-listed shares of Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker, rose 1.8% after it beat first-quarter revenue forecasts. CoreWeave surged 12.8% following its announcement of a multi-year agreement with Anthropic. Declining issues outnumbered advancers by a 1.25-to-1 ratio on the NYSE, while on the Nasdaq, 1,776 stocks rose and 2,822 fell as declining issues outnumbered advancers by a 1.59-to-1 ratio.