(Updates with index/price moves, macroeconomic data and geopolitical news from the first paragraph.)
US equity indexes traded higher, as standout gainers, consumer discretionary and communication services, helped offset a broad-based sectoral decline amid a surge in government bond yields.
The Nasdaq Composite rose 0.6% to 25,277.1, with the S&P 500 up 0.5% to 7,472.5 and the Dow Jones Industrial Average higher by 0.5% to 52,452.8.
Consumer discretionary catapulted 5.9%, and communication services soared 3.7%, outweighing a broad-based retreat led by materials and technology.
Amazon's (AMZN) web services cloud-computing unit reported overnight the fastest sales growth in 18 quarters, helping the e-commerce giant handily exceed market expectations for Q2 earnings and revenue. Shares soared 15%, the top gainer on the S&P 500, the Nasdaq, and the Dow, even as the retailer expanded its full-year 2026 capital expenditure guidance by about $20 billion to $220 billion.
Apple (APPL), meanwhile, sank 9%, among the worst performers on the S&P 500, the Nasdaq, and the Dow. The company missed market estimates for iPad and services revenue overnight in fiscal Q3, after recently raising prices for MacBooks and iPads amid surging memory and storage chip costs.
Iran said Friday that it had targeted US military assets at Kuwait's Ahmad Al-Jaber airbase, describing the attack as retaliation for US strikes a day earlier, Al Jazeera, a Middle East broadcaster, reported Friday. The US has not responded to Iran's attack yet, and specific details about the damage and casualties are not known, the news report said.
Meanwhile, President Donald Trump said the US has an "understanding" with Israel to start implementing an agreement in Gaza that would require Israeli forces to withdraw and Hamas to give up its weapons, a critical step in implementing a multi-phase peace plan to end the war, according to CNN.
The front-month US West Texas Intermediate crude oil climbed 1.3% to $84.71 a barrel, and global benchmark North Sea Brent advanced 1.1% to $89.98 a barrel. Both crude types traded off their respective session highs.
In economic news, a survey conducted by the University of Michigan showed respondents expect a 4.2% inflation rate over the next year, down from 4.6% in June, and 3.3% annual inflation over the next five years, in line with a month ago. The Federal Reserve has remained above its 2% inflation target for more than five years.
"Let me reiterate. There is no soft inflation target. There is no soft implicit target. Not on this committee's watch. There's only a target, and it's 2%," Fed Chair Kevin Warsh said in a press briefing after the central bank overcame dissent from three policy makers to leave interest rates unchanged on Wednesday.
US Treasury yields surged, with the 10-year trading up 7.4 basis points to 4.74% after touching its 52-week high intraday. The two-year yield soared 6.2 basis points to 4.29%.
In precious metal markets, gold futures dropped 1.5% to $4,100.2, and silver futures slumped 2.2% to $57.71.
Further in economic news, the University of Michigan consumer sentiment index was revised upwards to 55.2 for July from 54.4 in the preliminary estimate, compared with expectations for a downward revision to 54.0 in a survey compiled by Bloomberg. That was above the final reading of 49.5 in June.
The quarterly US employment cost index rose by 0.9% in Q2, in line with the previous quarter, the US Bureau of Labor Statistics reported on Friday. This was above the consensus estimate of a 0.8% gain in a Bloomberg-compiled survey.