On Friday, the S&P 500 Index fell 0.08% while the Dow Jones Industrial Average rose 0.39%. The Nasdaq 100 Index saw a bigger decline, decreasing by 1.27%. This downturn was largely driven by a sharp sell-off in chip stocks, with the iShares Semiconductor ETF dropping over 4%, amid concerns about AI demand sustainability despite Intel’s optimistic Q3 sales forecast of $15.8-16.8 billion.
Additionally, President Trump introduced tariffs ranging from 10% to 12.5% on 60 nations, replacing an expiring 10% global import tax. These new tariffs, aimed at addressing forced labor in supply chains, may impact various sectors but exclude key items like fuel and food. The markets responded to this news alongside worries over potential US military actions in Iran.
In economic news, US June new home sales increased by 1.6% to 628,000, surpassing estimates of 607,000, while building permits fell by 2.6% to 1.374 million. Labor market expectations are gauging a 38% chance of a 25 basis point rate hike at the upcoming FOMC meeting on July 28-29.
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