Worries about Iran hit stocks

U.S. stocks pulled further back from their records on Friday to cap the weakest week for the S&P 500 since May.

Indexes turned lower in the afternoon after Iran said it had seized a British oil tanker. Reined-in expectations for how deeply the Federal Reserve will cut interest rates at its next meeting also weighed on stocks.

Momentum for stocks has slowed since early June, when they began soaring on expectations that the Federal Reserve will cut interest rates for the first time in a decade. The Fed’s next meeting is scheduled for the end of this month.

Late in Thursday’s trading, Treasury yields sank after comments by Fed officials raised expectations of a cut of half a percentage point, rather than the typical quarter point. But yields climbed Friday as the market grew more convinced that the Fed will cut only 0.25 percentage points on July 31.

Microsoft jumped in morning trading after reporting stronger earnings for April through June than analysts expected, but its stock price faded and ended the day with just a 0.1% gain.

Energy stocks had the biggest gains in the S&P 500 after the price of oil climbed on worries about possible supply disruptions.

Boeing shares rose 4.5% even though it said it will take a $4.9 billion charge to cover possible compensation it will pay airlines following the grounding of its 737 Max jet. That’s a huge number, analysts concede, but it may provide some certainty to investors who had worried the payments could be much higher. Boeing also said the figure assumes its 737 Max jets return to service later this year.