US benchmark equity indexes were little changed intraday as President Donald Trump claimed that Iran violated the ceasefire agreement.
The Nasdaq Composite was up 0.1% at 25,390.4 after midday Friday, while the S&P 500 rose 0.1% to 7,367.4. The Dow Jones Industrial Average was just above the flatline at 51,922. Among sectors, healthcare paced the gainers, while industrials saw the biggest drop.
Trump accused Iran of launching drone attacks on ships passing through the Strait of Hormuz, more than a week after Washington and Tehran signed an interim peace agreement that includes the reopening of the crucial waterway for crude oil shipments.
"This is a foolish violation of our ceasefire agreement," Trump said in a social media post Friday.
Iran hit a vessel in the Strait of Hormuz on Thursday, disrupting evacuations of stranded seafarers, CNN reported.
West Texas Intermediate crude oil was down 3.5% at $69.43 a barrel intraday, while Brent fell 4.2% to $72.12. Both benchmarks were on track for weekly declines of more than 9%, with Brent headed for its sixth consecutive weekly fall.
"Oil was on track for a weekly decline after transits through the Strait of Hormuz accelerated, although an attack on a cargo ship by an 'unknown projectile' has renewed concerns about safe passage through the vital waterway," Saxo Bank said in a report Friday.
In a separate social media post, Trump threatened to impose a 100% tariff on all goods from any European country that implements a digital services tax on US companies.
"This tariff will supersede trade deals made with the country, whether implemented, signed, or not," Trump said.
US Treasury yields were lower intraday, with the two-year rate down 4.1 basis points at 4.09% and the 10-year rate falling 1.7 basis points to 4.38%.
Minneapolis Federal Reserve President Neel Kashkari said that an interest rate increase looks necessary this year.
"In March, I had penciled in one rate cut by the end of the year. In June, I've changed that to one rate hike by the end of the year," Kashkari, a Federal Open Market Committee voter this year, said during a panel discussion at the Aspen Ideas Festival, according to a CNBC report. "It's a pencil, and so we're going to have to see how the data comes in."
The Fed is likely to maintain interest rates stable for the rest of the year as inflation looks set to ease, Morgan Stanley said Friday in a report.
"We believe tariff pass through is ending, paving the way for substantial disinflation in core goods over the next year, and the recently signed (memorandum of understanding) between the US and Iran has helped push oil prices back toward pre-conflict levels," Morgan Stanley Chief US Economist Michael Gapen wrote. "In addition, we look for further moderation in shelter inflation and some payback from residual seasonality into year end."
US consumer sentiment increased in June amid moderating gasoline prices, while inflation expectations eased, a survey by the University of Michigan showed.
In company news, IBM (IBM) shares were up 4.6% intraday, the second-best performer on the Dow. The company's technology capable of producing chips smaller than one nanometer represents a "major moment" for the semiconductor industry amid increasing artificial intelligence workloads, Wedbush Securities said in a note on Friday.
Microsoft rose 4.7%, the top gainer on the Dow.
OpenAI is leaning toward delaying its initial public offering until next year, the New York Times reported Thursday, citing three people involved in the company's deliberations.
Onsemi (ON) shares slid nearly 24% intraday, the steepest drop on the S&P 500, after the chipmaker agreed to acquire semiconductor company Synaptics (SYNA) in a deal with an enterprise value of about $7 billion. Synaptics shares rose 0.2%.
Gold was up 1.1% at $4,091.50 per troy ounce, while silver advanced 1.2% to $59.04 per ounce.
Spot gold was headed for its fourth weekly fall as expectations of US interest rate hikes combined with a stronger dollar weighed on the yellow metal.
