Wall Street ended the week on a high note Friday, with the S&P 500 and Nasdaq Composite both closing at new all-time highs. The rally was powered by a robust April jobs report and continued enthusiasm for artificial intelligence-related stocks. The Dow Jones Industrial Average eked out a modest gain.
The S&P 500 rose 0.84% to finish at 7,398.93, while the Nasdaq surged 1.71% to 26,247.08. The Dow edged up just 0.02% to 49,609.16. After-hours trading from 4 p.m. to 8 p.m. ET saw minimal movement, with the S&P 500 up 0.02%, the Nasdaq 100 adding 0.15%, and the Dow rising 0.05%, while the Russell 2000 slipped 0.01%.
Jobs Data Exceeds Expectations
Investors drew confidence from the Labor Department's report showing the U.S. economy added 115,000 jobs in April, well above the 62,000 forecast by economists in a Reuters poll. The unemployment rate held steady at 4.3%. The data suggested the economy remains strong enough to support corporate earnings without overheating, reducing pressure on the Federal Reserve to adjust interest rates.
"This is an economy that seems hard to wreck," said Rob Williams, chief investment strategist at Sage Advisory Services, citing productivity gains, steady consumer spending, wealth effects, and corporate earnings as key supports for the market.
AI Stocks Lead the Charge
The rally was concentrated in AI-related names, particularly in the semiconductor space. Nvidia (NVDA) gained 1.8%, while Micron Technology (MU) and Sandisk (WDC) each surged more than 15% as investors piled into stocks tied to AI data-center infrastructure. The Philadelphia SE Semiconductor Index rose again, now up 55% for the quarter.
Strong earnings also buoyed the market. Of the 440 S&P 500 companies that have reported first-quarter results so far, 83% have beaten profit forecasts, according to LSEG data cited by Reuters. That compares favorably with the long-term average of 67%.
Notable Decliners
Not all stocks participated in the rally. Cloudflare (NET) tumbled 24% after announcing plans to cut about 20% of its workforce and projecting second-quarter revenue below analysts' estimates. Trade Desk (TTD) fell 1.8%. CoreWeave (CRWV) dropped 11.4% after raising the lower end of its full-year capex outlook. Expedia (EXPE) declined 9%, citing weaker demand related to the Middle East conflict.
Outlook and Risks
RBC Capital Markets raised its S&P 500 year-end target to 7,900 from 7,750, citing sturdy earnings growth and momentum in AI-related sectors. The firm highlighted demand for AI infrastructure as a key support for valuations, keeping market leadership with large-cap growth names.
However, risks remain. Brent crude oil climbed past $100 a barrel as optimism faded for a quick resolution to the Middle East conflict and the reopening of the Strait of Hormuz, a critical waterway for oil and LNG shipments. Scott Anderson, chief U.S. economist at BMO Capital Markets, warned that labor demand and supply are "in an uneasy balance" and that rising prices could erode consumer buying power.
Next week brings a fresh batch of data, including inflation figures, producer prices, retail sales, and earnings from Cisco (CSCO) and Applied Materials (AMAT). Investors will also monitor developments in the Iran conflict and a scheduled U.S.-China summit. "We have seen this tremendous rebound as markets have willed themselves to focus on only the positive," said Kristina Hooper, chief market strategist at Man Group.
