Quick overview

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U.S. stock indexes closed mixed on Friday as investors digested comments from Federal Reserve Chair Jerome Powell and remained cautious amid escalating tensions between Israel and Iran.

The three main Wall Street benchmarks posted a divergent performance. The Dow Jones Industrial Average, which tracks 30 major companies, slipped 0.10% to close at 42,171.66 points. The S&P 500, representing the largest U.S. firms by market cap, dipped 0.03% to 5,980.87, while the Nasdaq Composite edged up 0.13% to 19,546.27.

The Federal Reserve kept its benchmark interest rate unchanged at 4.25%–4.50%, in line with market expectations. During his press conference, Powell warned that policymakers anticipate upward pressure on inflation, largely due to newly imposed tariffs.

Investors Eye Geopolitical Tensions

Markets also remained on edge over the situation in the Middle East, following recent remarks from U.S. President Donald Trump, who demanded unconditional surrender from Iran’s Supreme Leader Ayatollah Ali Khamenei—a demand Khamenei swiftly rejected.

Sector Performance Mixed

Sector performance was uneven, with a slight bias toward losses. Information technology stocks outperformed, while within the Dow Jones, Goldman Sachs (+1.70%) and JPMorgan Chase (+1.65%) led the gainers.

Housing and Jobs Data Offer Mixed Signals

Economic data released Wednesday showed single-family housing starts in the U.S. rose 0.4% in May. However, a steep decline in building permits for future projects suggested continued weakness in the housing market, amid challenges from tariffs and excess housing inventory.

Meanwhile, the number of Americans filing new claims for unemployment benefits fell by 5,000 last week to a seasonally adjusted 245,000. Despite the decline, the figure remains consistent with signs of a cooling labor market in June.

Khamenei Escalates Middle East Tensions

Geopolitical risks remain a key concern for investors. Tensions rose further after Iran’s Supreme Leader Ali Khamenei publicly rejected Trump’s demands during a televised statement—his first public remarks since Friday, when Israel launched airstrikes against Iranian territory.

“Those who understand Iran, its people, and its history, know better than to speak to this nation in a threatening tone—because the Iranian nation will not surrender,” Khamenei declared.