The S&P 500 and Nasdaq experienced their second consecutive weekly losses, with declines of 0.6% and 2.1%, respectively. Oil prices surged, with West Texas Intermediate crude rising over 8% and Brent crude nearly 10%, following heightened tensions in the Middle East, particularly related to Iran.
President Trump’s warnings about military action against Iran contributed to this spike, which also reignited inflation fears, pushing the 10-year Treasury yield to its highest level since January 2025. Consequently, the likelihood of an interest rate hike by the Federal Reserve increased, with market expectations now at a 35% probability for a quarter-point increase.
In the tech sector, Alphabet's disappointing stock performance, despite better-than-expected earnings, highlighted investor skepticism towards high capital expenditures without clear returns, as the company plans to increase its capex to between $195 billion and $205 billion this year.
Conversely, Intel reported strong revenue growth, particularly in its data center segment, but its stock also fell nearly 8% due to a lack of major customer announcements. In healthcare, Eli Lilly's promising obesity drug data and Johnson & Johnson's early FDA approval for its robotic surgery system provided positive news, with respective stock gains of 1.4% and 4.1% for the week.
Overall, the week underscored the volatility in the market driven by geopolitical events and the cautious sentiment surrounding tech investments