Wall Street capped a winning week with fresh records for the S&P 500 and Nasdaq Composite on Friday, as a solid U.S. jobs report and continued momentum in artificial intelligence-related chip stocks powered the market higher. The S&P 500 advanced 0.84% to close at 7,398.93, while the Nasdaq surged 1.71% to 26,247.08, both all-time highs. The Dow Jones Industrial Average was nearly flat, ending at 49,609.16.
The Labor Department reported that nonfarm payrolls increased by 115,000 in April, with the unemployment rate holding steady at 4.3%. Health care led job gains with 37,000 new positions, followed by transportation and warehousing (+30,000) and retail (+22,000). Federal government payrolls declined by 9,000, and the information sector lost 13,000 jobs. The data alleviated concerns that the economy was slowing under the weight of higher energy costs and geopolitical tensions, and reduced expectations for rapid Federal Reserve rate cuts.
AI-linked chip stocks were standout performers, with the chipmaker index surging 11% from the prior Friday. Intel rose sharply after reports of a chip-making agreement with Apple. Micron and Sandisk also posted gains, riding a wave of upbeat tech earnings and investor relief around AI spending. The S&P 500 finished the week up 2.3%, while the Nasdaq posted a 4.5% weekly gain, its strongest six-week run since 2009.
First-quarter earnings have been a major tailwind. S&P 500 companies are now expected to report nearly 29% profit growth year-over-year, according to LSEG I/B/E/S data, driven largely by AI-focused firms. “It’s an economy hard to wreck,” said Rob Williams, chief investment strategist at Sage Advisory Services, citing gains in productivity, robust consumer spending, wealth effects, and solid earnings.
The jobs report did not trigger a uniform market reaction. Robert Pavlik, senior portfolio manager at Dakota Wealth, described the 115,000 job increase as “not gangbusters” but sufficient to ease concerns about an economic stall. Peter Cardillo, chief market economist at Spartan Capital Securities, noted the numbers keep the Fed’s focus on inflation rather than employment.
Wall Street strategists remain bullish on the AI trade. RBC Capital Markets raised its year-end S&P 500 target to 7,900 from 7,750, citing solid earnings and momentum in AI-related sectors. The rally has persisted despite stubborn inflation, uncertainty around rate cuts, and ongoing geopolitical tensions.
Not all stocks participated in the rally. Cloudflare tumbled after issuing a weak second-quarter outlook and announcing layoffs. CoreWeave also fell after reporting a larger-than-expected loss. The price action showed investors are unforgiving when AI-related spending, cost structures, or profit margins turn murky.
Some cracks appeared in the jobs data. The number of Americans working part-time for economic reasons jumped by 445,000 to 4.9 million. Payroll growth averaged just 48,000 over the past three months. Scott Anderson, chief U.S. economist at BMO Capital Markets, called the labor market’s push-pull an “uneasy balance” that does not give the Fed a strong reason to change course.
For now, steady hiring and robust tech earnings are convincing investors to look past concerns about oil prices, interest rates, and the Iran conflict. The next leg of the rally will likely depend less on a single jobs report and more on whether inflation data and corporate outlooks continue to justify current valuations.
