US stocks close in red as S&P 500 dips on oil rally and geopolitics

US stocks closed red on Friday, despite showing some recovery and optimism after the opening bell.

The benchmark S&P 500 index slipped 0.61%, leaving it about 5% below its most recent peak.

Meanwhile, the Nasdaq Composite fell 0.93%, and the Dow Jones Industrial Average dropped 119 points, or 0.25%.

Rising oil prices tied to geopolitical tensions have weighed on market sentiment, keeping investors cautious.

Volume picked up late as bargain hunters nibbled after Thursday's bloodbath, but traders kept one eye on crude's volatile swing and President Trump's stark reminder that the Iran conflict shows no signs of abating.

Utilities lead S&P 500 gains

Six of the S&P 500’s 11 sectors were trading higher on Friday, with utilities leading the gains.

The sector rose about 1.4%, comfortably ahead of energy, which was the second-best performer with an advance of roughly 0.8%.

Meanwhile, five sectors were in negative territory: information technology, communication services, materials, consumer discretionary, and industrials.

Technology and communication services were both down around 1.1% on the day.

For the week, utilities were up close to 1%, while energy was the only other sector on track for gains, climbing about 2.5% over the same period.

Among individual stocks, the tech sector showed considerable weakness with giants Nvidia, AMD, and Tesla ending the day in the red.

Shares of the beauty retailer Ulta Beauty dropped about 12% after the company reported weaker-than-expected earnings.

For the fourth quarter, Ulta posted earnings of $8.01 per share, slightly below analysts’ expectations of $8.03 per share, according to LSEG.

Revenue came in at $3.9 billion, topping the Street’s estimate of $3.8 billion.

Judge blocks Powell subpoena

A federal judge on Friday rejected the Justice Department’s attempt to subpoena Federal Reserve Chair Jerome Powell, delivering a significant legal victory for the central bank.

US District Judge James Boasberg ruled that the subpoenas issued by US Attorney Jeanine Pirro were improper and appeared to be politically motivated.

In his decision, Boasberg said the court found the effort was aimed at pressuring Powell amid President Donald Trump’s ongoing criticism of the Federal Reserve and its interest rate policies.

The ruling comes ahead of next week's Federal Reserve's high-stakes meeting, where investors are expecting the central bank to hold rates.

“The Court finds that the subpoenas were not issued for a legitimate purpose,” Boasberg wrote.

He added that the evidence suggested the primary goal was to harass Powell and push him either to comply with the president’s demands for lower interest rates or step aside so a new Fed chair could be appointed.

The development comes as a boost for the investors as it provides some certainty around the independence of the Federal Reserve amid the economic crisis.

Mortgage rates climb to 6.41%

Mortgage rates climbed to their highest level since September on Friday as bond yields rose amid escalating tensions related to the war in Iran.

According to Mortgage News Daily, the average rate on a 30-year fixed mortgage reached 6.41%.

Mortgage rates tend to track movements in the 10-year US Treasury yield, which moved higher again on Friday, contributing to the latest increase in borrowing costs.