Stocks Open Higher but Fade as Investors Take Profits; Energy Shines Amid Geopolitical Uncertainty

The major U.S. indices kicked off this quarter’s options expiration day on an upbeat note, supported by fresh headlines from both the White House and the Federal Reserve. President Trump commented that he will decide on a final course of action regarding Iran within the next two weeks, easing immediate fears of abrupt escalation. Meanwhile, Fed Governor Waller, a voting member of the FOMC, signaled that he doesn’t expect tariffs to drive inflation higher and that the Fed could be in a position to cut rates as early as July.

However, Waller emphasized that this was his personal view and not an official policy signal. Adding balance to the narrative, Richmond Fed President Barkin, who doesn’t vote this year, later countered that he sees no urgency for rate cuts given tariff-related uncertainty and ongoing economic resilience. The fed funds futures market largely sided with Barkin: the odds of a 25-basis-point cut at the July meeting ticked up only slightly—from 12.5% yesterday to 14.5% today, according to the CME FedWatch Tool.

Despite the initially positive tone, equities lost momentum as the day progressed, weighed down by profit-taking in some of the year’s biggest winners. Retail names were notable standouts: Kroger surged nearly 10%, CarMax climbed over 6%, and Darden Restaurants gained modestly, all after posting encouraging earnings results.

Elsewhere, mega-cap growth stocks and semiconductor shares were notable laggards. The Vanguard Mega Cap Growth Index dipped 0.55%, while the Philadelphia Semiconductor Index fell 0.8%. Chipmakers came under renewed pressure after a Wall Street Journal report suggested the Trump administration plans to revoke waivers that currently let U.S. semiconductor firms use American chipmaking tech in China.

This drag on semis weighed on the broader information technology sector, which slipped 0.3%. However, the biggest loser of the day was communication services, down 1.9%, driven by weakness in its heavyweight constituents. Alphabet fell 3.6% after news that the EU Court of Justice Advocate General proposed upholding a hefty €4.1 billion fine in the long-running Google Android case. Meta Platforms also slipped nearly 2% amid reports that it had previously explored acquisitions of AI startups Perplexity and Safe Superintelligence.

In contrast, the energy sector stood out as the best performer, climbing 1.1% as oil prices rose ahead of the weekend. WTI crude settled at $73.88 per barrel, up 0.6%, fueled by geopolitical jitters and lack of progress in diplomatic efforts. An AP report confirmed that a meeting between European foreign ministers and their Iranian counterpart ended without a breakthrough, though both sides signaled an openness to future discussions.

Our U.S. portfolio, FTinvest 11, showed notable weakness in early trading on Friday, hovering near the flatline for most of the session. By the close, the index managed to inch slightly higher, ending the day with a modest 0.04% gain at 781.59.

For the week, FTinvest 11 slipped 0.18%, closely mirroring the performance of the S&P 500, which faced similar headwinds in recent days as markets digested geopolitical risks and mixed economic signals.