(Updates with latest market prices and developments.)
US benchmark equity indexes were mostly higher intraday as oil prices pulled back, with traders apparently shaking off worries over heightened tensions in the Middle East and President Donald Trump's new phase of global tariffs.
The Dow Jones Industrial Average was up 0.5% at 51,989 after midday Friday, while the S&P 500 rose 0.4% to 7,437.9. The Nasdaq Composite edged down 0.1% to 25,109.9. Barring technology, all sectors were in the green, led by real estate.
West Texas Intermediate crude was down 4% at $88.51 a barrel, while Brent fell 4.7% to $96. Both benchmarks advanced earlier in the day and were still on track for sharp gains for the week.
Pakistan has held exploratory discussions with Iran's Interior Minister Eskandar Momeni as it seeks a path towards a resumption of stalled talks between Washington and Tehran, Reuters reported, citing Pakistani sources. Islamabad recently also discussed the Middle East situation with China, according to the report.
Bahrain, Jordan and Kuwait were fending off Iranian attacks again Friday, while Iran's military claimed it launched attack drones targeting US assets in Bahrain's Sheikh Isa Air Base and Jordan's Al-Azraq Air Base, CNN reported, citing local press.
US Treasury yields were lower intraday, with the two-year rate down 3.4 basis points at 4.33% and the 10-year rate falling 2.8 basis points to 4.68%.
In a fact sheet published Thursday, the Office of the US Trade Representative announced new tariffs of 10% or 12.5% on 60 economies that it said have failed to prohibit or effectively enforce bans on imports made with forced labor, including China, India, the UK and the European Union.
The duties took effect at 12:01 am ET Friday, replacing Trump's temporary 10% global tariffs, which expired at the same time, CNBC reported.
Earlier this week, Trump signed three proclamations to impose 50% tariffs on the imports of motor vehicles, alcohol and dairy products from Canada.
"The snap-back in oil prices, as well as another turn of the screw in tariffs, complicates the job of central bankers everywhere, and lands with a thud ahead of the (Federal Open Market Committee) meeting," BMO said in a report Friday.
The probability that the US Federal Reserve will leave its benchmark lending rate unchanged next week stood at 64% Friday, down from 87% a week ago, according to the CME FedWatch tool. The odds of a quarter-percentage-point increase moved up to 36% from 13%.
In economic news, US private-sector output growth reached an eight-month high in July amid services boost, though price pressures intensified due to disruptions caused by the Middle East conflict, S&P Global's (SPGI) flash purchasing managers' index showed Friday.
New-home sales in the US increased last month for the first time since March as house prices continued to fall, though inventory remained elevated at more than a nine-month supply, official data showed.
In corporate news, Verizon Communications (VZ) raised its full-year earnings outlook amid phone subscriber gains in the second quarter. The company's shares were up 4.1% intraday Friday.
American Express (AXP) was the worst performer on the Dow, down 5.1%. The payments company's second-quarter earnings topped Wall Street's estimates, but revenue missed expectations.
Gold was up 0.7% at $4,068.20 per troy ounce, while silver gained 1.3% to $58.83 per ounce.
