Wall Street extended its winning streak to six consecutive weeks, with the S&P 500 and Nasdaq Composite both closing at all-time highs Friday after a week marked by robust corporate earnings, a resilient labor market, and easing — if unresolved — anxiety over the Strait of Hormuz.
The S&P 500 finished the week up 2.3%, closing Friday at 7,398.93. The Nasdaq climbed 4.5% on the week, ending at 26,247.08. The Dow Jones Industrial Average lagged considerably, posting a weekly gain of just 0.2% to settle at 49,609.16.
A Rocky Start, Then a Rally
The week opened under pressure. On Monday, markets sold off after Iran fired missiles at oil installations in the United Arab Emirates, stoking fresh fears about stability in the Persian Gulf. The S&P 500 slid 0.4% and materials and energy stocks led declines, with the Materials Select Sector SPDR falling 2% and the energy sector losing ground as oil prices spiked. West Texas Intermediate crude briefly traded above $104 per barrel as the Strait of Hormuz crisis commanded attention on trading desks.
By Tuesday, the mood had shifted. Oil prices eased and investors refocused on earnings, sending the S&P 500 up 0.8% to a new all-time high. Technology was the standout sector for the session, adding more than 2%.
The turnaround in sentiment reflected a growing conviction among traders that the Strait of Hormuz standoff, while unresolved, may not escalate into a broader supply disruption. A new acronym — NACHO, for “Not A Chance Hormuz Opens” — circulated on trading desks to describe skepticism that repeated White House statements about reopening the waterway would produce a quick resolution. Analysts said markets appeared to be pricing in a prolonged but contained standoff rather than an acute shock.
Chips and AI Drive the Gains
The week’s biggest moves came from the semiconductor sector. Advanced Micro Devices surged more than 20% after reporting first-quarter earnings that beat consensus estimates on both the top and bottom lines, briefly pushing the chipmaker’s market capitalization past $700 billion. Micron Technology added 13% and Qualcomm rose roughly 9%, lifting the VanEck Semiconductor ETF to a new 52-week high.
The gains reflected continued investor appetite for companies tied to artificial intelligence infrastructure buildout, which has powered a sustained rally in chip stocks over the past year. Micron, which supplies memory components critical to high-performance AI processors, has risen approximately 700% over the past twelve months.
Cloud computing and cybersecurity firm Akamai Technologies surged 25% after announcing that a major U.S. frontier AI developer had committed $1.8 billion over seven years for its cloud infrastructure services.
Jobs Report Provides a Tailwind
Friday’s session got an additional lift from the April employment report, which showed the economy added 115,000 nonfarm payrolls — topping Wall Street forecasts. The unemployment rate held steady at 4.3%. Health care, transportation and warehousing, and retail trade led hiring, while federal government employment continued its decline, falling by 9,000 in the month. Federal payrolls have now dropped by 348,000 since peaking in October 2024.
Average hourly earnings for private-sector workers rose 3.6% over the prior year, suggesting wage growth remains solid without reigniting immediate inflation concerns.
Notable Movers
Not all of the week’s headlines were positive. FedEx shares fell sharply after Amazon announced the launch of Amazon Supply Chain Services, a competing freight, fulfillment, and parcel shipping network for businesses — a direct challenge to FedEx’s core commercial operations. GameStop fell 10% after proposing to acquire eBay for roughly $56 billion in cash and stock, a deal that drew skepticism from investors.
Norwegian Cruise Line beat first-quarter earnings estimates but still saw its shares fall after the report failed to satisfy investors looking for a more robust outlook.
The Broader Picture
The six-week winning streak for the S&P 500 is the longest such run since 2024. Underpinning the rally is a first-quarter GDP reading that showed the economy expanded at a 2.0% annual rate, an acceleration from the prior quarter’s anemic 0.5% pace. Consumer spending and business investment both contributed meaningfully to the rebound.
The Federal Reserve held its benchmark interest rate steady at a target range of 3.5% to 3.75% at its most recent meeting, though the decision came with notable internal dissent — an 8-4 vote that reflected divisions over how to weigh sticky inflation against signs of slowing job growth. Core PCE inflation stood at 4.3%, still well above the Fed’s 2% target, leaving the path for rate cuts uncertain heading into the summer.
By: DNU Staff