Wall Street capped another winning week with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closing at record highs on Friday. The rally was fueled by a renewed surge in artificial intelligence-related stocks, led by a dramatic jump in Dell Technologies after the company reported a strong outlook tied to AI server demand.
The S&P 500 rose 16.43 points, or 0.2%, to 7,580.06, marking its ninth consecutive weekly gain. The Dow added 363.49 points, or 0.7%, to 51,032.46, while the Nasdaq Composite gained 55.15 points, or 0.2%, to 26,972.62, according to data from the Associated Press.
Dell's AI-Driven Surge Lifts Server Stocks
Dell Technologies was the standout performer, soaring 32.8% in after-hours trading to $420.91. The company reported first-quarter revenue of $43.8 billion, an 88% increase year-over-year, driven by AI-optimized server revenue that skyrocketed 757% to $16.1 billion. Chief Operating Officer Jeff Clarke noted that Dell booked $24.4 billion in AI orders, declaring that "the AI opportunity shows no signs of slowing."
The robust results lifted other server makers. Hewlett Packard Enterprise climbed 12.7% to $43.04, and Super Micro Computer advanced 11.6% to $46.09 in extended trading. Microsoft rose 5.4%, and the broader technology sector gained 1.87%, reflecting what Ohsung Kwon, chief equity strategist at Wells Fargo, described as "euphoric sentiment in the market around AI."
Oil Prices Retreat Amid Ceasefire Hopes
Commodities provided a tailwind as oil prices eased. U.S. crude settled at $87.36 a barrel, and Brent crude closed at $92.05, both down roughly 1.7%. Traders are monitoring U.S.-Iran ceasefire talks, which could ease shipping disruptions and inflation concerns. The 10-year Treasury yield slipped to 4.441%.
Not all stocks participated in the rally. Alphabet fell 2.5%, Costco slid 3.9%, and Walmart lost 2.6%, according to Reuters. The Russell 2000 index of small-cap stocks declined 0.6%, highlighting a narrow market advance.
Inflation Data Raises Stagflation Concerns
The Federal Reserve's preferred inflation gauge, the personal consumption expenditures price index, rose 3.8% year-over-year in April, its highest since May 2023. Meanwhile, first-quarter GDP growth was revised down to a 1.6% annual rate. Peter Cardillo of Spartan Capital Securities warned of a "stagflation problem," characterized by sluggish growth and rising prices.
Investors are now looking ahead to the May jobs report, due June 5 at 8:30 a.m. Eastern. Economists polled by Reuters expect 85,000 jobs added and an unemployment rate of 4.3%. A strong report could reignite rate hike fears, though Ross Mayfield, investment strategy analyst at Baird, noted that traders have priced in about a 50-50 chance of a hike in the fourth quarter but added, "I don't expect the Fed to do much of anything."
Broadcom's earnings next week will serve as another key test for the AI trade, as the Philadelphia semiconductor index has surged roughly 80% from its March low, according to Reuters. Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, said that a hot jobs report and higher inflation could prompt the Fed to rethink policy, while a cooler report might ease tightening fears.
