Wall Street continued its strong performance on Friday, with major stock indices extending their recent upward trend and concluding a month of robust gains.
The S&P 500 climbed by 0.2%, marking its seventh continuous rise and achieving its ninth consecutive winning week, the longest streak since 2023. This benchmark index reached a new all-time high for the fourth consecutive day.
The Dow Jones Industrial Average increased by 0.7%, and the Nasdaq composite added 0.2%. Both the Dow and Nasdaq also hit new records, building on previous highs set earlier in the week.
Big technology stocks have driven the market’s record-breaking surge. These stocks, with higher valuations, wield significant influence over the market direction. In May, technology sector stocks within the S&P 500 increased by more than 15%, while most other sectors fell. Angelo Kourkafas, a senior global strategist at Edward Jones, noted the rally’s strong tech reliance and the substantial earnings backing it, questioning its sustainability.
Tech stocks continued to power the market on Friday. Microsoft saw a 5.4% rise, and Broadcom gained 4.7%. Dell Technologies led the S&P 500’s gains with a remarkable 32.8% surge following quarterly profits that far exceeded expectations. The company also improved its forecast, attributing this to strong demand for AI computing.
Other S&P 500 sectors lost ground on Friday. Noteworthy declines included Paramount Skydance, which dropped 1.9%, Amazon.com at a 1.2% decrease, and Costco Wholesale closing 3.9% lower.
Despite rising tensions and economic concerns due to the U.S.-Iran conflict and inflation worries, Wall Street made gains.
Efforts to extend a ceasefire between the U.S. and Iran reduced oil price pressures, with Brent crude for August falling 1.7% to $91.12 per barrel, although it remains elevated compared to pre-war levels. Similarly, U.S. crude oil for July delivery also fell by 1.7% to $87.36 per barrel.
Treasury yields remained stable as oil prices dropped slightly. The 10-year Treasury yield decreased to 4.44% from 4.45% on Thursday. However, high oil prices continue to concern Wall Street due to restricted oil flow through the Strait of Hormuz, where 20% of global oil and gas shipments occur, leading to price increases that impact inflation and consumer spending.
Recent reports highlighted inflation’s rise and its effect on consumers, exacerbated by ongoing tariffs. A Federal Reserve-preferred inflation measure reached its highest level in three years in April. Consumer confidence has slipped amid inflationary pressures.
Corporate profit reports have somewhat alleviated Wall Street’s inflation anxiety. FactSet data showed a 28% overall growth in S&P 500 company profits for the latest quarter. Most of these companies have released their earnings, which might shift investor focus back to inflation, consumer behavior, and the Federal Reserve’s interest rate strategy.
The Fed is maintaining its benchmark interest rate as it monitors inflation. The CME FedWatch tool indicates expectations for rates to remain steady in June and throughout the year. While lowering rates could decrease borrowing costs and stimulate the economy, it could amplify inflation when prices are already elevated.
Despite Middle East conflict-induced market volatility, stocks achieved further gains in May. The S&P 500 ended the month with a 5.1% increase and has risen 10.7% year-to-date.
Overall, the S&P 500 rose 16.43 points to close at 7,580.06 on Friday. The Dow expanded by 363.49 points, finishing at 51,032.46, and the Nasdaq grew by 55.15 points to end at 26,972.62. European and Asian markets mostly saw gains as well.