S&P 500 and Nasdaq Post Record Highs on Back of AI and Earnings Optimism

Record-Breaking Weeks for S&P 500 and Nasdaq

The S&P 500 and the Nasdaq notched record highs on Friday, driven by gains in AI-related stocks such as Nvidia, Sandisk, and Micron Technology. The strong performance of these stocks was fueled by high demand from the rapid buildout of AI data centers.

Nvidia led the charge, climbing 1.8% on the day. Memory and storage sellers Micron Technology and Sandisk also soared, with each stock increasing more than 15%. The Philadelphia SE Semiconductor index jumped, bringing its gain so far in the second quarter to 55%.

The S&P 500 and the Nasdaq have surged to record highs this week, with investors focused on strong financial reports from U.S. companies. Despite concerns over high oil prices related to the Middle East conflict, the market has remained resilient, with the S&P 500 earnings expected to climb almost 29% year-over-year in the first quarter.

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Data released on Friday showed U.S. employment increased more than expected in April, with the unemployment rate holding steady at 4.3%. This reinforced expectations that the Federal Reserve would leave interest rates unchanged for some time, with traders expecting the central bank to hold interest rates steady in the 3.50% to 3.75% range until the end of the year.

The S&P 500 technology index jumped 2.7%, while the utilities sector index fell 0.9%. The S&P 500 and the Nasdaq notched their sixth straight weekly gains, the longest such winning streak since October 2024.

The S&P 500 has now gained 8% in 2026, while the Nasdaq has rallied 13%. The earnings optimism helped investors look past fresh attacks between U.S. and Iranian forces in the Gulf. However, the market was not immune to earnings disappointments, with Cloudflare, Trade Desk, and CoreWeave all declining after releasing disappointing earnings reports.

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Declining stocks outnumbered rising ones within the S&P 500 by a 1.4-to-one ratio. The S&P 500 posted 28 new highs and 30 new lows, while the Nasdaq recorded 134 new highs and 119 new lows. Volume on U.S. exchanges was relatively light, with 17.2 billion shares traded, compared to an average of 17.6 billion shares over the previous 20 sessions.