Despite the World Cup, US retailers are complaining about a weak start to the second half of the year. The announcement of new US tariffs on imported drones, however, is driving up the stocks of domestic manufacturers. When it comes to individual values, the papers from Reddit are in demand.
Profit-taking after the S&P 500's record high and ongoing tensions in the Middle East are weighing on US stock markets. The Dow Jones index of blue chips and the broader S&P 500 were 0.2 percent lower at 53,742 and 7,786 points on Friday. The index on the Nasdaq technology exchange fell 0.4 percent to 26,698 points.
"Of course today is Friday, and experience shows that geopolitical risks, or at least the bombastic rhetoric between the US and Iran, are increasing heading into the weekend," said Kyle Rodda, strategist at Capital.com. On Thursday, the US warned that it could maintain the naval blockade against Iran indefinitely and increase economic pressure on Tehran as long as there is no solution to the conflict. The price for North Sea Brent crude oil then rose by almost one percent to $87.81 per barrel (159 liters). US light oil WTI rose in price by around half a percent to $81.65 per barrel.
Earlier in the week, strong corporate profits and easing interest rate concerns created a positive mood on the stock markets. A decline in US inflation in July had dampened expectations that the US Federal Reserve could raise interest rates in September. On Friday, current data showed that US retailers had a surprisingly weak start to the second half of the year. At the same time, the mood of US consumers deteriorated surprisingly sharply in August.
"This week's economic data actually gives the Fed a lot more room to maneuver," said Bob Lang, founder and chief strategist at Explosive Options. The US Federal Reserve is trying to keep inflation in check with tight monetary policy without stalling the economic engine. However, Elwin de Groot, chief strategist at Rabobank, was skeptical. According to the expert, central banks cannot yet ignore developments in geopolitics and the energy market. "While this week's U.S. inflation report was broadly in line with expectations, it will not end the debate within central banks."
In terms of individual stocks, Reddit shares jumped more than twelve percent after it was announced that the social network would be included in the S&P 500 index. The announcement of new US tariffs on imported drones also boosted the shares of domestic manufacturers. The stocks of companies such as Unusual Machines, Red Cat, Kratos and Aerovironment increased by around 2.5 to more than 25 percent.
Investors also took advantage of energy stocks in the S&P 500, which climbed around 1.5 percent. Mining and industrial stocks rose by around half a percent each. "It's good to see that the market is now more broadly positioned and not just hidden away by tech giants like Microsoft and Nvidia," commented Explosive Options expert Lang.
