Wall Street Ends Volatile Week Mixed as Oil Retreats, Tariffs Loom July 25

Wall Street closed a volatile week with divergent moves on Friday as oil prices retreated and investors digested fresh tariffs. The S&P 500 edged above flat while the Nasdaq fell 0.6%, capping a 2% weekly loss. Brent crude dropped 4% to below $96 per barrel after surging past $100 on Middle East tensions, offering some relief to inflation-weary markets.

Oil relief masks chip weakness and tariff concerns

Brent North Sea crude fell nearly 4% to trade under $96 a barrel on Friday after soaring 7% Thursday on Houthi attacks in the Red Sea. West Texas Intermediate dropped more than 3% to $89.31. The retreat eased inflation fears, but semiconductor shares endured another round of selling, with Intel down nearly 8% despite beating earnings expectations. President Trump’s new Section 301 tariffs targeting 10% to 12.5% rates on US imports from top trading partners took effect overnight, adding uncertainty to the market’s path forward.

Fed rate hike odds surge as markets brace for next week

Expectations that the Federal Reserve could raise interest rates at its meeting next week jumped from 13% last week to 30% currently, according to market analysis. The CME FedWatch Tool shows a 90% probability of at least one 25-basis point rate hike before year-end. Angelo Kourkafas of Edward Jones noted markets face uncertainty over unpredictable geopolitical events and questions about how the Fed will weigh the latest jump in oil prices.

Magnificent Seven shed $800 billion as tech rout persists

The Dow Jones rose 0.5% to 51,947.25, the S&P 500 inched above flat at 7,411.98, and the Nasdaq fell 0.6% to 24,975.82 on Friday. All three indexes posted weekly losses, led by a 2% decline for the Nasdaq over five days. The Magnificent Seven stocks collectively shed nearly $800 billion in market value Thursday amid a sell-off sparked by ballooning AI spending, though Apple jumped 3.5% to support the blue-chip index.

Asia and Europe feel the ripple as tariffs and oil collide

South Korea’s KOSPI plunged 5.98% on Friday and was headed for a fifth consecutive weekly decline, while Hong Kong’s Hang Seng Index slipped 1.44%. Wall Street opened subdued after the tech-led selloff, as investors digested fresh earnings, escalating Middle East tensions, and the tariff announcement. S&P Global’s flash PMI showed US business activity expanded at the fastest pace in eight months in July, boosted by the World Cup, offsetting some market pressure.

Final Thoughts

Markets remain caught between conflicting signals: oil prices retreating but tariffs rising, strong business activity but chip stocks falling, and Fed rate hike odds climbing. Investors face a pivotal week ahead with the central bank meeting and geopolitical risks unresolved.

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