S&P 500 and Nasdaq hit records as chipmakers surge, jobs beat

The S&P 500 closed at a record 7,398.93 on Friday, rising 0.84 per cent, while the Nasdaq Composite surged 1.71 per cent to an all-time high of 26,247.08. A rally in artificial-intelligence chip stocks and a stronger-than-expected April jobs report extended both indices’ winning streak to six weeks.

The Dow Jones Industrial Average edged up 0.02 per cent to 49,609.16. The S&P 500 has gained 8 per cent in 2026 and the Nasdaq 13 per cent. The six-week run is the longest for both since October 2024.

Micron Technology and Sandisk each soared more than 15 per cent, leading a broad advance in semiconductor shares that pushed the Philadelphia SE Semiconductor index to another record. The chip gauge is up 55 per cent so far in the second quarter. Nvidia climbed 1.8 per cent.

The chip surge drew fuel from two fronts: ongoing AI infrastructure spending and a rotation into momentum names that picked up speed after the White House indicated progress toward a ceasefire with Iran earlier in the week. The supply-chain and energy-cost overhang that had weighed on tech manufacturers began to lift.

The April jobs report showed US employers added 115,000 positions last month, well above the 65,000 consensus estimate in a Reuters poll of economists. The unemployment rate held at 4.3 per cent, the Bureau of Labor Statistics reported.

“The labor market is not booming, but it is proving harder to break than many feared,” said Olu Sonola, head of US economics at Fitch Ratings.

Healthcare providers added 37,000 jobs and transportation and warehousing firms 30,000. Manufacturers cut 2,000 positions and have shed 66,000 over the past year. Average hourly earnings rose 0.2 per cent from March and 3.6 per cent from April 2025, a pace consistent with the Federal Reserve’s 2 per cent inflation target. The labour force participation rate fell to 61.8 per cent, its lowest since October 2021.

“America’s hiring recession appears to be over,” said Heather Long, chief economist at Navy Federal Credit Union. “Average job gains in 2025 were an anemic 10,000 a month. So far in 2026, the average is 76,000.” Long cautioned that inflation is consuming those wage gains and that the consumer price index is expected to approach 4 per cent.

The jobs data reinforced expectations that the Federal Reserve will keep its benchmark rate in the 3.50 per cent to 3.75 per cent range through the end of the year. Fed Chair Jerome Powell said last week the job market has shown “more signs of stability,” and the semi-annual Financial Stability Report flagged oil-price shocks and geopolitical risks as the central bank’s top concerns.

“The jobs report actually makes it less likely that we see a rate cut anytime soon because the Fed can say: the job market is solid, let’s get inflation back down to 2 per cent. This is not the time to cut rates,” said Gus Faucher, chief economist at PNC.

What the print showed

The composition of job growth was mixed. February and March payrolls were revised down by a combined 16,000. The labour force shrank as Baby Boomer retirements and Trump administration immigration restrictions reduced the pool of workers. Matthew Martin of Oxford Economics said the break-even level of monthly job creation needed to hold unemployment steady is now near zero.

Brent crude rose back above $100 a barrel on Friday after diplomatic progress toward reopening the Strait of Hormuz stalled. US petrol prices averaged $4.50 a gallon this week for the first time since July 2022, according to the American Automobile Association. Prices are up more than 50 per cent since the Iran conflict began in late February.

The momentum trade accelerates

The rally’s narrow leadership drew caution from Wall Street. Barclays strategists noted that momentum-factor positioning has reached extremes that historically preceded selloffs. Goldman Sachs’s trading desk wrote that valuations for high-momentum stocks are stretched and that positioning sits among the highest levels in recent years.

The fundamentals remain intact. Of the 440 S&P 500 companies that have reported first-quarter results, 83 per cent beat profit estimates, well above the 67 per cent long-term average tracked by LSEG I/B/E/S. S&P 500 earnings are on track for roughly 29 per cent year-over-year growth.

RBC Capital Markets raised its S&P 500 year-end target to 7,900 from 7,750 on Friday, pointing to earnings momentum and the AI investment cycle.

Rob Williams, chief investment strategist at Sage Advisory Services, said the economy “seems hard to wreck,” crediting “the productivity story, the spending, the consumer wealth effect and the earnings.”

The countercurrent

Market breadth was negative. Declining stocks outnumbered gainers within the S&P 500 by a ratio of 1.4 to 1. About 17.2 billion shares changed hands, slightly below the 20-session average of 17.6 billion. The S&P 500 recorded 28 new highs against 30 new lows; the Nasdaq posted 134 new highs and 119 new lows.

Consumer sentiment, measured by the University of Michigan, fell to a record low as households absorbed higher petrol costs and two years of above-target inflation. Resilient hiring paired with deteriorating confidence has become a hallmark of the 2026 expansion.

Cloudflare shares plunged 24 per cent after the company said it would cut roughly 20 per cent of its workforce and forecast second-quarter revenue below analyst estimates. CoreWeave dropped 11.4 per cent after it lifted the lower end of its full-year capital spending forecast. The company blamed rising component costs. Expedia fell 9 per cent, citing weaker travel demand from Middle East instability.

Next week’s inflation and retail sales data will show whether the rally can hold. The headwinds are building: $4.50 petrol, a record-low confidence reading, and an Iran conflict with no end in sight.