The S&P 500 and Nasdaq Composite closed at record highs on Friday, propelled by a surge in artificial intelligence-related chip stocks and a stronger-than-expected April jobs report that reinforced confidence in the economy. The S&P 500 rose 0.83% to 7,397.72, while the Nasdaq jumped 1.54% to 26,202.53. The Dow Jones Industrial Average, however, lagged, eking out a modest 0.04% gain to finish at 49,618.14.
The rally was led by semiconductor companies tied to AI data center expansion. Nvidia added 1.8%, while Micron Technology and SanDisk each surged roughly 12%. The Philadelphia semiconductor index gained nearly 5%, extending its second-quarter advance to 54%. The broader market, however, showed mixed breadth: six of the 11 S&P 500 sectors declined, with healthcare falling the most, and losers slightly outnumbered winners on the index.
The April jobs report from the Bureau of Labor Statistics showed nonfarm payrolls increased by 115,000, well above the 62,000 expected by economists polled by Reuters. The unemployment rate held steady at 4.3%. The data gave investors reason to believe the Federal Reserve would maintain its current interest rate stance, with a focus on inflation rather than labor market strength.
“This is an economy that seems hard to wreck,” said Rob Williams, chief investment strategist at Sage Advisory Services. Adam Sarhan, CEO of 50 Park Investments, described the report as “not too hot and not too cold.” Peter Cardillo, chief market economist at Spartan Capital Securities, said the data signals the Fed should “concentrate on inflation.”
First-quarter earnings continued to support the market. According to LSEG data, S&P 500 profits are on track to climb nearly 29% year-over-year, with 83% of the 440 companies that have reported so far beating analyst expectations. RBC Capital Markets raised its year-end S&P 500 target to 7,900, citing earnings strength and AI momentum. The firm also downgraded healthcare to “market weight” from “overweight.”
Oil prices climbed again, with Brent crude pushing past $100 per barrel, raising fresh inflation concerns. The rise comes amid limited optimism for a swift reopening of the Strait of Hormuz. Investors are now turning their attention to next week’s consumer price index report, particularly the core figure that excludes food and energy.
“Markets have willed themselves to focus on only the positive,” said Kristina Hooper, chief market strategist at Man Group. Michael Arone, chief investment strategist at State Street Investment Management, added, “Earnings are the lifeblood of this rally.”
Some stocks faced headwinds. Cloudflare slumped after issuing a second-quarter outlook that disappointed investors. CoreWeave lost ground after raising the low end of its full-year capital expenditure guidance due to higher component costs. The Trade Desk and Expedia also declined on softer projections.
With Friday’s close, the S&P 500 and Nasdaq notched their sixth straight weekly gain, the longest winning streak since October 2024. The Dow is on track for a second consecutive weekly advance. The message from the market remains clear: AI momentum and corporate earnings continue to drive the action, but oil and inflation risks could alter the narrative.
