Stocks closed lower on Friday and for the week on geopolitical worries.

On Thursday night, Israel's strike on Iran's nuclear (and ballistic) programs sank stocks.

Rising tensions in an already troubled region weighed on shares as the market braced for Iran's response, and what the situation will turn into.

We now know that the strike and response was more than just a one-time thing. Israel has said the operations could go on for days or even weeks. And with Iran's ongoing retaliation, tensions only seem to be escalating.

Although, it should be noted that geopolitical events (Russia/Ukraine war, Israel vs. Hamas, the bombing of Houthi rebels in Yemen, and the overthrow of Assad's Syrian regime) have all had a limited, if any, impact on the markets. Short-term volatility is usually the immediate byproduct. Especially if it moves the price of oil. But there has been no lasting market impact from any of the above.

It remains to be seen if that will be true this time. Odds are that it will. Although, if the conflict turns into something bigger, or if the U.S. gets dragged into a war, that could change things. For now, however, that does not seem to be the case. But we shall see.

Prior to Friday's market action, stocks were headed for their 3rd up week in a row.

Better-than-expected inflation reports, which came on the heels of the previous week's better-than-expected Employment report, shows the resilience of the U.S. economy and projects growth, defying calls for rising inflation and a possible recession. Moreover, we just wrapped up another better-than-expected earnings season which saw an 11.9% EPS growth rate for Q1. And with more EPS growth projected for Q2's earnings season (which is right around the corner), the market is ripe for further gains.

In other news, Friday's Consumer Sentiment report jumped to 60.5, up 15.9% from last month's 52.2 and views for 53.5. The year-ahead inflation expectations report (which is part of that report) eased to 5.1% vs. last month's 6.6% pace.

Aside from increased tensions in the Middle East, the market is in a good place. And the momentum is clearly to the upside.

The situation will be closely monitored.

But the market will also be on the lookout for any new news regarding tariffs.

Mid-week last week, Treasury Secretary Scott Bessent said that the U.S. has 18 "important trading partners," and that the Administration is "working toward deals with those countries." But added that the White House was open to extending the 90-day pause on reciprocal tariffs to those who have shown "good faith" in ongoing trade negotiations. This was a positive development given that there's less than 1 month left on that 90-day pause.

Meantime, the S&P and Nasdaq are both in the plus column for the year. And they are only 2.72% and 3.80% (respectively) away from hitting their all-time highs.

See you tomorrow,