US Stocks Reach New Heights Amid Optimism on Middle East Developments

U.S. Stocks Rise as Investors Cheer Progress in Middle East Conflict Talks and Strong Corporate Earnings

U.S. stocks rebounded on Friday, with the Dow Jones Industrial Average reaching an intraday record high, as investors expressed optimism over progress in talks to end the Middle East conflict and a strong corporate earnings season. The S&P 500 is on track to post its eighth consecutive weekly gain, its longest winning streak since December 2023.

The Philadelphia Semiconductor Index rose 2.5%, driven by a 12% jump in Qualcomm, while Nvidia slipped 1.6%. The semiconductor sector has been a key driver of recent Wall Street gains. The Dow Jones Industrial Average surged 428.65 points, or 0.86%, to 50,714.31, the S&P 500 gained 45.82 points, or 0.62%, to 7,491.54, and the Nasdaq Composite gained 130.07 points, or 0.50%, to 26,423.17.

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Nine out of the 11 major S&P 500 sector indexes were gaining, led by healthcare, industrials, and technology stocks. Communications and consumer staples were losing ground.

Shares of U.S. computer makers Dell and HP surged following strong results from China's Lenovo Group, which reported a better-than-expected 27% jump in quarterly revenue. Dell Technologies hit a record high after jumping 17%, while HP Inc surged over 15%. Estée Lauder rose 12% after the cosmetics maker and Spanish perfumery Puig ended talks for a potential merger.

Kevin Warsh was sworn in as chair of the Federal Reserve on Friday, taking the helm at a pivotal moment for the U.S. economy as higher gasoline prices tied to the Iran conflict fuel inflation and weigh on consumer sentiment. Long-dated government bond yields were lower, having pulled back from recent highs. The yield on benchmark U.S. 10-year notes fell 2.6 basis points to 4.558%.

The CBOE volatility index plumbed its lowest in more than two weeks, ahead of the Memorial Day weekend. Workday gained 5% after the human resources software provider exceeded expectations for first-quarter revenue and profit. The S&P 500 posted 28 new 52-week highs and no new lows, while the Nasdaq Composite recorded 116 new highs and 65 new lows.

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