The S&P 500 Index closed up 0.84% on Friday, marking a new record high alongside the Nasdaq 100, which surged 2.35%. This rally was primarily driven by strong performances from chipmakers and AI-infrastructure stocks, despite geopolitical tensions surrounding the Iran conflict. The positive momentum was further supported by better-than-expected corporate earnings, with 83% of S&P 500 companies reporting Q1 results that exceeded estimates.
The labor market showed resilience, as April nonfarm payrolls rose by 115,000, significantly above the anticipated 65,000, while the unemployment rate remained stable at 4.3%. However, consumer sentiment hit a record low, which could indicate potential headwinds for future consumer spending. The market is currently pricing in a 6% chance of a rate cut at the upcoming FOMC meeting, reflecting uncertainty amid these mixed economic signals.
For market professionals, the strong earnings season and robust job growth suggest continued upward momentum for equities, particularly in technology and AI sectors. However, the declining consumer sentiment may warrant cautious positioning as it could impact future spending trends.
Source: nasdaq.com