US equities ended the week on a mixed note, with the S&P 500 and Nasdaq Composite closing at record highs on Friday, supported by optimism around potential US-Iran talks and a surge in semiconductor stocks led by Intel.
The Dow Jones Industrial Average, however, lagged behind, ending the session slightly lower.
The S&P 500 rose 0.8% to close at 7,165.08, while the Nasdaq Composite gained 1.6% to 24,836.60, with both indices also hitting fresh intraday records.
In contrast, the Dow Jones Industrial Average fell about 79 points, or 0.16%, to 49,230.71.
Iran talks optimism lifts sentiment despite tensions
Investor sentiment was buoyed by signs that diplomatic efforts between the US and Iran may resume, even as geopolitical tensions remain elevated.
Reports indicated that Abbas Araghchi was expected to arrive in Islamabad to discuss proposals for restarting negotiations.
At the same time, White House Press Secretary Karoline Leavitt confirmed that Steve Witkoff and Jared Kushner would travel to Pakistan for talks mediated by local officials.
Markets have been sensitive to developments surrounding the Iran conflict, particularly disruptions in the Strait of Hormuz, a key global energy route.
Oil prices eased slightly following the latest diplomatic signals, with US crude trading above $94 per barrel and Brent crude above $105.
Despite ongoing uncertainty, some investors appear to be looking past near-term geopolitical risks.
Semiconductor rally, Intel surge drive market gains
Technology stocks led the advance, with semiconductor companies extending a strong weekly rally.
The iShares Semiconductor ETF recorded its 18th consecutive session of gains, highlighting sustained momentum in the sector.
Intel was a standout performer, with its shares surging more than 20% after the company reported stronger-than-expected first-quarter results and issued an upbeat outlook for the second quarter.
The chipmaker also benefited from improving demand in its data center and artificial intelligence business.
The broader rally in semiconductors reflects easing concerns about the return on investment from AI-related capital expenditures.
Other chipmakers, including Advanced Micro Devices and Arm Holdings, also posted gains, reinforcing the sector’s leadership.
Weekly performance mixed as focus shifts to Fed
For the week, major indices delivered mixed results.
The S&P 500 is on track to finish up about 0.6%, while the Nasdaq has gained roughly 1.5%, marking a fourth consecutive week of advances for both indices—their longest streak since late 2024.
The Dow, however, is set to end the week down about 0.4%, snapping a three-week winning run.
A strong start to the earnings season has helped underpin equity markets, with first-quarter earnings growth expectations rising to 16.1%, according to LSEG data, up from 14.4% at the beginning of April.
Attention is now turning to the upcoming Federal Reserve meeting, where investors will look for signals on interest rate cuts and leadership developments.
The Justice Department’s decision to drop its investigation into Jerome Powell has removed a potential obstacle to confirming Kevin Warsh as the next central bank chair.
Markets are currently pricing in about a 39% probability of at least a 25-basis-point rate cut by December, according to CME’s FedWatch tool, up from around 23% in the previous session.
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