Futures on US central bank funds have pushed back expectations for the next rate cut to June, following improved employment data released on Thursday. Meanwhile, oil prices fell alongside gold and silver after US President Donald Trump adopted a wait-and-see approach regarding unrest in Iran, having previously threatened intervention.
Investors were also digesting optimism over artificial intelligence, following encouraging results and forecasts from TSMC published on Thursday.
"(There is a) sense of waiting regarding Iran and with respect to companies reporting next week (Netflix, J&J, and Intel), which could reinvigorate the markets. This wait will most likely result in a somewhat bullish outcome during the US afternoon," analysts at Bankinter said on their Telegram channel.
"European futures are looking somewhat weak (down about 0.2%), but US futures are better (+0.2%). Today there is only some noise around the yen, less sense of urgency regarding Iran (which may not necessarily be true), support from TSMC, and the US/Taiwan tech agreement," they added.
On the macroeconomic front, markets will be closely watching monthly industrial production data, the New York Fed's services business activity, and the NAHB US housing market index during the European afternoon.
All in all, the Madrid index recorded nine sessions — including today — with minimal movement, ending a seven-week upward streak.
As of 0823 GMT on Friday, Spain's IBEX 35 benchmark stock index was down 31.00 points, or 0.18%, at 17,611.70 points, while for the week as a whole, the index shows a decline of 0.21%.
In the banking sector, Santander lost 0.61%, BBVA fell 0.72%, Caixabank dropped 0.61%, Sabadell slipped 0.34%, Bankinter edged up 0.07%, and Unicaja Banco lost 0.64%.
Among major non-financial stocks, Telefónica fell 0.44%, Inditex gained 0.61%, Iberdrola rose 0.19%, Cellnex dropped 0.46%, and oil company Repsol lost 1.15%.
The FTSE Eurofirst 300 index of leading European stocks fell 0.14%.
(Reporting by Benjamín Mejías Valencia; editing by Jorge Ollero Castela)
