Global shares fell and oil prices got a boost on Friday after U.S. and Iranian negotiators called off peace talks, while the risk of official Japanese intervention mounted as the yen traded on the brink of a 40-year low.

In New York, U.S. stocks were broadly higher, with the S&P 500 rising 80.48 points, or 1.08%, to 7,500.58. The Dow Jones Industrial Average gained 72.15 points, or 0.14%, to 51,564.70 in early trading.

NASDAQ ROARS HIGHER

The technology-heavy Nasdaq Composite continues its nearly 500-point ascent from Thursday. As of 9:57 a.m. EST, it was up another 496.28 points, or 1.91%, to 26,517.93, outperforming the broader market.

The Nasdaq's strength on Thursday, June 18, and in early trading on Friday morning, June 19, was driven primarily by a powerful rally in semiconductor and AI-related stocks, along with improving macroeconomic sentiment.

Chipmakers led the advance after President Trump announced a partnership between Intel and Apple to design and manufacture chips in the United States. Intel surged 11%, while Nvidia gained nearly 3% and Micron jumped almost 9%, helping lift the technology-heavy Nasdaq far more than the Dow.

Investors also responded positively to signs that the AI spending boom remains intact. Apple's acknowledgment that memory-chip shortages are persisting because of strong AI demand fueled another surge in memory-chip stocks and reinforced confidence in the broader AI trade.

Small-cap stocks led the major indexes higher, with the Russell 2000 advancing 61.78 points, or 2.12%, to 2,979.77.

The dollar headed towards its strongest weekly gain in a month, mostly at the expense of the yen, which has fallen for five out of the last six weeks to trade close to ‌its weakest since late 1986, prompting a volley of warnings from officials in Tokyo that intervention is an option.

The MSCI All-World index ​was down 0.15%, having dipped into negative territory after U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators in Switzerland on Friday.

European stocks fell 0.17%, paring earlier gains, while U.S. stock futures fell between 0.4% ⁠and 0.5%. The stock market was closed on Friday for the Juneteenth holiday.

CEASEFIRE CONFIDENCE WANES

The Israeli military said it carried out strikes overnight and continued ​attacking what it described as Hezbollah militants and infrastructure in several areas in southern Lebanon.

Confidence in a lasting truce ebbed, pushing oil ⁠up modestly to $80 a barrel, although the price was still headed for a drop of 8% this week, after the U.S. and Iran signed an agreement to halt fighting and reopen the Strait of Hormuz.

Tankers have started sailing through the strait, which the war effectively closed, after the U.S. lifted its blockade on Iran on Thursday.

"We concede that there will ‌be a number of ships eager to leave the Gulf's warm waters, and we think crude will struggle to find its footing ​amid a flurry of 'open ‌for business' headlines, and yet we question the durability of the deal," said analysts at RBC Capital Markets in a note to clients.

"In the event that the deal holds ... the Hormuz reopening trajectory could resemble something ‌similar to the Red Sea, where shipping traffic remains over 50% below pre-crisis levels despite the Houthis signing a deal in May 2025 to end hostilities."

DOLLAR STRENGTH

The dollar index hit a new 13-month high, fueled by a firm pledge from new Federal Reserve Chair Kevin Warsh ⁠to tackle inflation and ensure price stability. That has prompted traders to ‌assume there will be at least one rate ⁠hike this year, compared with a negligible possibility a couple of weeks ago.

The shift in tone from the Fed has hit Treasuries hard. Two-year yields are nearly 10 basis points higher than ⁠they were ⁠this time last week, while benchmark 10-year yields have fallen 3 basis points to 4.451%.

That reflects investors pricing in the chances of near-term rate rises, while gaining some confidence that these could prove short-lived ‌given the drop in the oil price.

The cash U.S. bonds market was also closed on Friday.

YEN ON THE BACK-FOOT

With the dollar in the ascendant, the yen stayed on the back-foot to trade around 161.3, leaving the U.S. currency at its strongest since last July, and well beyond the 160-threshold that most ‌see as a ​trigger for Japanese intervention.

"Today's U.S. holiday creates a lower-liquidity ‌backdrop, a window during which Japanese authorities have previously shown a preference to intervene," ING strategist Francesco Pesole said.

"A lack of intervention today would leave scope for speculators to push towards 162-163 given the supportive USD environment," he said.

The pound was up 0.2% ​at $1.321, after a 0.7% drop the previous day as the Bank of England kept interest rates on hold in a 7-2 vote. Labour mayor Andy Burnham won an election in the north of England on Friday, removing a key obstacle to a leadership challenge against Prime ‌Minister Keir Starmer.