US benchmark equity indexes were higher intraday, while oil prices fell as traders awaited progress in diplomatic efforts to end the Middle East conflict.
The Dow Jones Industrial Average was up 1% at 50,786.6 after midday Friday, after closing at a record high in the previous session. The S&P 500 and the Nasdaq Composite were up 0.7% each at 7,499.5 and 26,464.9, respectively, intraday. Barring communication services and consumer staples, all sectors were in the green, led by healthcare.
West Texas Intermediate crude oil was down 0.6% at $95.74 a barrel, while Brent fell 0.2% to $102.37. Both benchmarks were on track for weekly declines.
"Markets are still searching for signs of progress in a potential deal between the US and Iran," ING Bank said in a report Friday. "While there are signs of optimism, uncertainty reigns."
A Qatari negotiating team arrived in Iran Friday in coordination with Washington to help secure a deal to end the conflict, Reuters reported, citing an unnamed source.
On Thursday, US Secretary of State Marco Rubio reportedly said there were "good signs" that a peace deal is in sight, but warned that any agreement would be "unfeasible" if Iran insists on controlling shipping through the crucial Strait of Hormuz. Iran is discussing setting up a permanent toll system with Oman to formalize its control of the strait, news outlets reported.
"No one in the world is in favor of a tolling system," Rubio told reporters, according to CNBC. "It can't happen [and] it would be unacceptable."
US Treasury yields were mixed intraday Friday, with the 10-year rate down 2.4 basis points at 4.56% and the two-year rate rising four basis points to 4.12%.
Kevin Warsh took charge of the Federal Reserve Friday, replacing former Chair Jerome Powell amid growing signs of division at the central bank as inflation heats up.
Fed Governor Christopher Waller said he is prepared to be patient in holding monetary policy at its current restrictive stance as the Middle East conflict continues to evolve.
"If I believe inflation expectations start to become unanchored, I would not hesitate to support an increase in the target range for the federal funds rate," Waller said. "But at this point, that action is premature."
In company news, Dell Technologies (DELL) shares soared 16% intraday, the top gainer on the S&P 500, as Wells Fargo raised its price target on the stock to $270 from $180.
Take-Two Interactive Software (TTWO) shares were down 3.6%, the worst performer on the S&P 500. Late Thursday, the video game publisher logged a smaller-than-expected fiscal fourth-quarter loss and said it was on track to launch the highly anticipated "Grand Theft Auto VI" Nov. 19.
In economic news, US consumer sentiment declined to a fresh record low in May as people fear that high gasoline prices could erode their purchasing power, according to a survey by University of Michigan.
"Consumer sentiment fell for the third straight month as supply disruptions in the Strait of Hormuz continue to boost gasoline prices," Surveys of Consumers Director Joanne Hsu said. "The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month."
Gold was down 0.5% at $4,519.30 per troy ounce, while silver lost 0.1% $76.66 per ounce.
