U.S. equities enter a holiday-shortened trading week on a high note, with the Dow Jones Industrial Average closing at an all-time high on Friday. The blue-chip index added 294.04 points, or 0.6%, to finish at 50,579.70, while the S&P 500 rose 27.75 points, or 0.4%, to 7,473.47, marking its longest weekly winning streak since 2023. The Nasdaq Composite advanced 50.87 points, or 0.2%, to 26,343.97.
Markets were closed Monday for Memorial Day, but trading resumes Tuesday with a renewed focus on macroeconomic data. The key event this week is Thursday's release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge. March's PCE showed a 3.5% year-over-year increase, and the April reading will be closely scrutinized for signs of easing price pressures.
Oil Prices Tumble on Iran Talks Progress
Crude oil prices experienced a sharp decline, with U.S. West Texas Intermediate crude falling $4.77 to settle at $91.83 per barrel, and Brent crude dropping $4.86 to $98.68. The sell-off followed reports that President Donald Trump indicated progress in negotiations to end the war with Iran, easing fears of supply disruptions from the Middle East. Stephen Innes of SPI Asset Management described the move as a shift from "geopolitical fear to maybe a peace dividend," though he cautioned that trade remains tied to the Strait of Hormuz.
Market Breadth and Sector Performance
Market internals were robust, with nine of the 11 major S&P 500 sectors posting gains on Friday. Healthcare, utilities, industrials, and technology led the advance, while communication services and consumer staples lagged. Advancing issues on the New York Stock Exchange outpaced decliners by a 1.68-to-1 ratio, though trading volume slipped below the 20-session average ahead of the long weekend.
Semiconductor stocks remained in focus, with the Philadelphia Semiconductor Index climbing. Qualcomm shares surged 12%, while Nvidia slipped 1.9%. PC makers Dell Technologies and HP rallied after China's Lenovo reported a 27% revenue jump; Dell closed up 17% to a record, and HP finished 15% higher.
Earnings and Economic Data Ahead
This week's earnings calendar includes reports from Salesforce, HP, Marvell Technology, and Snowflake after Wednesday's close, followed by Costco, Dell, Autodesk, and MongoDB on Thursday. The second estimate of first-quarter GDP is also due Thursday, with the initial reading showing a 2.0% annualized growth rate, up from 0.5% in the prior quarter.
Additional data points include April durable-goods orders and new-home sales, both released Thursday, which will provide insight into the impact of higher interest rates and energy costs on consumer and business demand.
James St. Aubin, chief investment officer at Ocean Park Asset Management, noted that the fundamental picture remains "really solid," citing strong earnings and economic data. However, he pointed out that the bond market has been "cooling off" after long-term yields pushed equities lower earlier in the week.
Analysts caution that the current calm could be fragile, with the outcome of the PCE report, oil price volatility, and Treasury yield movements all capable of reversing Friday's rally. The Kiplinger Letter warned that the economy is "bound to suffer" if the Iran conflict disrupts energy exports, while a hotter-than-expected PCE reading could reignite inflation fears.
