Attention Shifts Back to Iran: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a down market open later on Friday morning. 

1. Futures tracking the Nasdaq and the S&P 500 ​tumbled more than 1% on Friday, with an AI-driven rally in U.S. stocks poised to stall, as ‌Treasury yields jumped on concerns about higher inflation driven by the Middle East conflict. (Reuters) 

Brent crude oil futures are up more than 3% at around $109 a barrel after shifting messages from President Trump about the Strait of Hormuz. (WSJ)

2. An underappreciated surplus of crude oil, sloshing around storage tanks and aboard ships, cushioned the global economy when the Persian Gulf closed 2½ months ago. That excess supply is now dwindling at a record pace, with oil executives and analysts predicting that a harsh reckoning is set to upend the relative calm in energy markets. Acute shortages of key fuels and soaring prices could emerge within weeks if the Strait of Hormuz remains shut. (WSJ)

3. The dollar ​rode U.S. Treasury yields higher on Friday and was set for its biggest weekly gain in more than two months, as ‌mounting inflationary pressures from higher energy prices fueled bets on a Federal Reserve rate hike this year. (Reuters)

Investors shed government bonds around the world, propelling borrowing costs to multi-year highs from Japan to the US amid intensifying fears that war-driven inflation will force central banks to pursue higher interest rates. (Bloomberg)

Those three points above tell us the market’s focus is quickly shifting back to the U.S.-Iran war, the Strait of Hormuz’s continued closure, and all that entails. With what appears to be a stalemate between both sides, comments from Trump that he is “not going to be much more patient” are once again raising concerns about the potential for more strikes. 

That has the potential to not only extend the conflict but to extend the disruptions and inflationary pressures it has caused. Meanwhile, the S&P 500’s relative strength index level reached 77.71 on Thursday night. The Nasdaq Composite’s RSI level was even higher at 79.42.

4. With red-carpet treatment, selfies and culinary diplomacy, America’s richest and most powerful executives — from Tesla’s ​Elon Musk to Nvidia’s Jensen Huang — sought to rekindle business ties with China this week at a leadership summit in Beijing. But as ‌U.S. President Donald Trump flew out of Beijing on Friday afternoon, there was little clarity on what the summit delivered for the business delegation that was travelling with the president. (Reuters)

We warned there could be some disappointment for those expecting grand announcements following the Trump-Xi summit. Case in point, the market expected Boeing (BA) to walk away with an order as many as 500 aircraft from China compared to President Trump’s comment of a potential 200-plane order. With a backlog of more than 6,800 unfilled jet orders, another 200 or even 300 isn’t really going to make much of a difference. We recently added BA shares to the Portfolio’s Bullpen and we’re keeping a close eye on them. 

You know “follow-through” is something we watch closely, and for the Trump-Xi summit that means paying attention to what is or isn’t announced in the coming days. Not “beliefs,” “might,” “perhaps” or “could,” but formal announcements from the Trump administration and that gaggle of companies that accompanied the summit’s U.S. delegation.

5. Applied Materials delivered record revenue and earnings in its second fiscal quarter of fiscal 2026, signaling a robust expansion in the semiconductor equipment market driven by the global build-out of artificial intelligence (AI) infrastructure. (DigiTimes)

Applied (AMAT) delivered a beat-and-raise April quarter earnings report last night, and we’ll have more in-depth comments for TheStreet Pro members later on Friday morning. The big comment, however, that we will share with you here and now is that Applied boosted its semiconductor equipment business to grow more than 30% in calendar 2026. In February, its guidance called for more than 20%. That is spurring multiple price target increases for AMAT shares on Friday morning. 

6. Cerebras Systems, a chipmaker focused on AI inference, rocketed onto Nasdaq on Thursday with an opening trade at $350 a share. It closed the day at $311.07, giving it a 68% pop over its IPO price… “The offering was 20x oversubscribed, the demand was incredible, I would have never expected it this quickly.”… Cerebras’ IPO now sets the stage for an avalanche of AI public offerings later this year. SpaceX, which bought xAI, is expected to go public in the coming weeks, while Anthropic and OpenAI are eyeing offerings potentially later in the year. (PitchBook)

That was quite the pop in shares of Cerebras (CBRS) and the shares look to give more of it back on Friday morning. Given our positions in Morgan Stanley (MS), Bank of America (BAC) and SuRo Capital (SSSS), the degree of oversubscription for the transaction and the IPO pricing well above its targeted range are positive indicators for the IPO market. 

PitchBook correctly points out there are more than a few large and high-profile IPOs expected to come to the market in the coming quarters. Chatter around the SpaceX IPO suggests a June time frame with the prospectus potentially coming next week and the investor road show kicking off the week of June 8. If that timing holds, it will imply a banger of a quarter for investment banking fees. 

7. Economic data today per TipRanks: Empire State Manufacturing (May), Industrial Production & Capacity Utilization (April)

8. Companies reporting today per TipRanks: There are no major corporate earnings expected on Friday.

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At the time of publication, TheStreet Pro Portfolio was long AMAT, BAC, MS and SSS shares.