NEW YORK – The S&P 500 and Nasdaq notched record high closes on May 5, lifted by Intel and other AI-related stocks, as a US-Iran ceasefire held firm and investors focused on strong quarterly earnings.
Washington said on May 5 its ceasefire with Iran was intact, allaying worries that attempts by both sides to assert control over the Strait of Hormuz would escalate hostilities.
Investors focused on AI-related companies, with the Philadelphia SE Semiconductor index surging to a record high.
Chip designer AMD rallied ahead of its quarterly report after the bell, with analysts expecting a 33 per cent surge in revenue.
S&P 500 companies are on track to post aggregate earnings growth of 28 per cent year-over-year for the first quarter, the strongest quarterly profit growth since 2021, according to Mr Tajinder Dhillon, head of earnings research at LSEG.
Wall Street’s AI heavyweights account for much of that optimism.
“Markets are following fundamentals. Earnings are coming in pretty strong, and the expectation is that will carry forward into the rest of the year,” said Mr Tom Hainlin, an investment strategist at US Bank Wealth Management in Minneapolis.
“Business spending remains strong, whether it’s on AI or other productivity tools, and consumers continue to spend,” Mr Hainlin said.
According to preliminary data, the S&P 500 gained 58.72 points, or 0.82 per cent, to end at 7,259.47 points, while the Nasdaq Composite gained 259.06 points, or 1.03 per cent, to 25,326.51.
The Dow Jones Industrial Average rose 354.85 points, or 0.73 per cent, to 49,296.75.
Brent crude futures fell but still traded at US$110 a barrel.
Data on May 5 showed US job openings fell to 6.866 million in March, slightly above the 6.835 million estimate. That reinforced the view that labour market resilience could give the central bank room to keep interest rates higher for longer.
The Institute for Supply Management’s Non-Manufacturing Purchasing Managers’ Index for April came in at 53.6, narrowly missing the estimate of 53.7, according to economists polled by Reuters.
Grain trader Archer-Daniels-Midland rose after reporting better-than-expected first-quarter profit on higher margins.
DuPont rallied after the industrial materials maker lifted its annual profit forecast.
Shares of Pinterest soared after the image-sharing platform forecast second-quarter revenue above analysts’ estimates. REUTERS
