U.S. stocks surged on Friday, with the Dow Jones Industrial Average reaching an intraday record high, as investors were buoyed by progress in Middle East peace talks and a robust corporate earnings season. The S&P 500 is poised for its longest weekly winning streak since December 2023, marking its eighth consecutive gain.
The Dow Jones Industrial Average rose 428.65 points, or 0.86%, to 50,714.31, while the S&P 500 gained 45.82 points, or 0.62%, to 7,491.54. The Nasdaq Composite added 130.07 points, or 0.50%, to 26,423.17. Nine of the 11 major S&P 500 sector indexes advanced, with healthcare, industrials, and technology stocks leading the gains. Semiconductor stocks also performed well, with the Philadelphia Semiconductor Index climbing 2.5%, driven by a 12% increase in Qualcomm, although Nvidia fell 1.6%.
Shares of U.S. computer makers soared after Lenovo Group reported a 27% increase in quarterly revenue. Dell Technologies reached a record high with a 17% jump, and HP Inc surged over 15%. Meanwhile, Estée Lauder's stock rose 12% following the termination of merger talks with Spanish perfumery Puig.
“Earnings season looked really good and the economic data, save a few outliers, looked pretty solid so fundamentally the picture looks really solid.”
James St. Aubin, Chief Investment Officer at Ocean Park Asset Management
Long-dated government bond yields declined, with the yield on benchmark U.S. 10-year notes falling 2.6 basis points to 4.558%. This cooling in the bond market was seen as encouraging by investors. Kevin Warsh was sworn in as the new chair of the Federal Reserve, taking over at a critical time as rising gasoline prices linked to the Iran conflict impact inflation and consumer sentiment.
"Earnings season looked really good and the economic data, save a few outliers, looked pretty solid so fundamentally the picture looks really solid," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.
Background
The U.S. stock market's rise comes amid ongoing efforts to resolve the Middle East conflict, with U.S. Secretary of State Marco Rubio noting progress in talks with Iran, despite significant remaining differences. This development, coupled with strong corporate earnings, has bolstered investor confidence.
Looking ahead, investors will be closely monitoring further developments in Middle East negotiations and their potential impact on global markets, as well as the Federal Reserve's policy direction under Kevin Warsh's leadership.
