The U.S. equity market closed higher on Friday, buoyed by a brief pause in oil‑price volatility and a surge in Bitcoin that lifted crypto‑linked shares. Yet the rally was tempered by modest weakness in chip and artificial‑intelligence names and a climb in Treasury yields, underscoring the lingering uncertainty over Middle‑Eastern tensions and U.S. policy toward Iran.

Market Snapshot

  • S&P 500 finished 0.43 % above its prior close.
  • Dow Jones Industrial Average rose 0.98 %.
  • Nasdaq 100 edged up 0.33 %.
  • E‑mini S&P futures (ESU26) gained 0.37 %.
  • September E‑mini Nasdaq futures (NQU26) advanced 0.27 %.

Oil Prices Calm After Iranian President’s Comments

Crude prices steadied below the one‑month peak reached on Thursday, when President Masoud Pezeshkian urged an end to the U.S.–Iran conflict. The statement helped temper the sharp rally that had followed President Trump’s threat to isolate Iran and its trading partners. October West Texas Intermediate (WTI) futures closed marginally higher, but the gains were muted by the Iranian president’s remarks that “it would be better to end the war today, now that we are strong and have dignity, with the whole world acknowledging our victory.” Investors are watching Monday’s press conference, where Treasury Secretary Bessent promised to detail the administration’s strategy for isolating Iran’s economy.

Bitcoin Surge Fuels Crypto‑Linked Gains

Bitcoin’s price climbed more than 6 % on Friday, reaching a three‑month high and adding over 20 % to its weekly performance. The rally was driven by renewed institutional demand following the Treasury’s announcement to at least double long‑dated bond buybacks, which sparked a massive short‑covering spree. According to Coinglass, more than $2 billion of short Bitcoin positions in perpetual futures were liquidated since Wednesday. The surge lifted a number of cryptocurrency‑exposed stocks, which dominated the broader market’s gains.

Sectoral Mix and Yield Pressure

While crypto names pushed the market higher, chipmakers and AI‑infrastructure stocks displayed slight weakness, limiting the Nasdaq 100’s upside. The 10‑year Treasury note yield rose 3 basis points to 4.73 %, adding a drag on equities. The combination of yield pressure and sectoral unevenness kept the rally modest.

Mixed U.S. Economic Data

Friday’s economic releases painted a mixed picture. The August S&P manufacturing PMI fell 0.7 points to 53.2, below the anticipated unchanged reading of 53.9. In contrast, the services PMI climbed 2.8 points to 56.8, surpassing the forecasted 54.0 and marking the fastest expansion in 4.5 years. The divergence between manufacturing contraction and services growth added to the market’s uncertainty.

Middle‑Eastern Tensions and the Strait of Hormuz

The absence of a clear resolution to the U.S.–Iran dispute keeps the Strait of Hormuz closed, constraining Middle‑Eastern crude supply and sustaining upward pressure on oil prices. President Trump’s recent remarks—warning that any nation providing support to Iran would face severe consequences—have amplified market jitters. Treasury Secretary Bessent’s commitment to announce isolation plans on Monday, and Energy Secretary Chris Wright’s assertion that the U.S. is “playing the long game” with Iran, suggest that de‑escalation is unlikely in the near term. An Iranian military spokesperson reiterated that no vessel can safely traverse the Strait without Iran’s authorization, dismissing Trump’s claim that the United States holds “total control” over the waterway.

Earnings Outlook Fuels Optimism

The prospect of a robust second‑quarter earnings season is a key driver behind the market’s upward trajectory. Bloomberg Intelligence notes that the S&P 500 is projected to record earnings growth of nearly 32 % in Q2, a figure that surpasses the 23 % estimate and is almost four times the average growth rate observed outside the COVID era since the fourth quarter of 2013. Artificial‑intelligence spending is expected to be the dominant contributor, with AI infrastructure companies anticipated to generate almost 60 % of the S&P 500’s earnings‑per‑share expansion during the period. As of now, 86 % of the 468 S&P 500 firms that have disclosed Q2 results have outperformed consensus expectations, according to Bloomberg data.

The market is pricing in a 39 % probability that the Federal Open Market Committee will raise rates by 25 basis points at its September 15‑16 meeting.

Overseas Markets Show Mixed Outcomes

European indices finished the day on a modest lift, with the Euro Stoxx 50 up 0.63 % and China’s Shanghai Composite gaining 0.04 %. In contrast, Japan’s Nikkei‑225 slipped 0.30 %.

Interest‑Rate Environment

U.S. Treasury yields continued to move higher. The 10‑year note fell 7.5 ticks, yet its yield ticked up 3.2 bp to 4.736 %. The rally in equities and a recent release indicating that the August S&P services Purchasing Managers’ Index (PMI) expanded at its fastest pace in 4.5 years helped lift the 10‑year note’s price, thereby pushing yields up. European government yields were on a downward trend; the German 10‑year bund slipped 0.1 bp to 3.258 %, while the UK 10‑year gilt fell 0.7 bp to 5.060 %. Markets are currently discounting a 95 % likelihood that the European Central Bank will hike rates by 25 bp at its next September 10 policy meeting.

Euro‑Zone Economic Indicators

The August manufacturing PMI in the euro zone rose unexpectedly by 0.9 to 52.8, exceeding the forecast of a decline to 51.8 and marking the fastest expansion in 4.25 years. The composite PMI also beat expectations, climbing 0.1 to 52.1 from a projected 51.7. Consumer confidence in the region saw a surprise uptick, rising 0.4 to a six‑month high of –15.5, better than the anticipated drop to –16.0. In the United Kingdom, retail sales for July excluding auto‑fuel fell 0.9 % month‑on‑month, a sharper decline than the expected 0.5 % and the largest drop in 14 months. Meanwhile, inflation expectations eased: the ECB’s projected 1‑year CPI for July fell to 2.9 % from 3.0 % in June, and the 3‑year forecast slipped to 2.7 % from 2.8 % in June.

Sector‑Specific Movements

Crypto‑Linked Equities

Bitcoin’s rally to a three‑month high lifted several crypto‑exposed stocks. Coinbase Global surged 7 % to lead gains in the Nasdaq 100, while MicroStrategy added more than 6 %. Circle Internet Group also advanced over 5 %. These gains were partly driven by Bitcoin’s 6 % climb over the week.

Mining and Commodities

Rising commodity prices buoyed mining shares. Southern Copper jumped over 8 %, and Freeport‑McMoRan rose more than 7 %. Gold and silver producers Anglogold Ashanti, Newmont Corp, and Barrick Mining all advanced above 3 %.

Technology and AI Infrastructure

A number of chipmakers and AI‑infrastructure names fell, dampening broader market gains. Marvell Technology led the losses in the S&P 500 and Nasdaq 100, down over 5 %. Other down‑trending names included Applied Materials, AMD, ARM Holdings, Intel, and Lam Research, each slipping more than 2 %. Additional declines were seen in KLA Corp, Western Digital, Micron Technology, and Seagate Technology, all down over 1 %.

Utilities

Utility shares slipped in tandem with the rise in Treasury yields. Sempra fell over 5 %, Edison International over 4 %, and other power firms such as American Electric Power, CenterPoint Energy, Xcel Energy, Exelon, Public Service Enterprise Group, and Duke Energy all declined between 2 % and 3 %.

Healthcare

Positive news from oncology trials helped lift Moderna and Merck & Co. Moderna’s shares rose over 8 %, while Merck added more than 2 % following reports that its melanoma vaccine, combined with Keytruda, significantly reduced recurrence rates in a large, late‑stage study.

Corporate Highlights

Parsons Corporation (PSN) finished the session up over 6 %. The rise followed a Baird upgrade, which shifted the rating from neutral to outperform and lifted the price objective to $57 per share.

Tesla Inc. (TSLA) saw a gain of more than 5 %. The rally was sparked by Nevada’s Transportation Authority granting approval for up to 5,000 Tesla autonomous vehicles to operate paid passenger rides for the first year in Clark County.

Ross Stores (ROST) posted a close above 4 %. The company reported Q2 retail sales of $6.26 billion, surpassing analysts’ expectation of $6.16 billion. In addition, it revised its 2027 earnings‑per‑share guidance upward to a range of $8.61–$8.77 from the prior $7.50–$7.74 forecast.

Teradyne Inc. (TER) slipped more than 2 %. The decline followed a Baird downgrade that moved the rating from outperform to neutral.

Earnings Report – Napco Security Technologies

On August 24, 2026, Napco Security Technologies (NSSC) released its earnings results. Further details are available on Barchart.