Semis Melt Up Leading the Nasdaq and S&P to a Record Close
The S&P 500 and Nasdaq Composite closed at record levels on Friday after investors were given a hopeful sign that peace talks between the U.S. and Iran would soon take place in Pakistan.
The broad market index finished up 0.8% at 7,165.08, while the tech-heavy Nasdaq added 1.63% to settle at 24,836.60. Both indexes also scored fresh all-time intraday highs. However, the Dow Jones Industrial Average fell 79.61 points, or 0.16%, to end the at 49,230.71.
MS NOW reported, citing a Pakistani official, that Iranian Foreign Minister Abbas Araghchi is expected to arrive in Islamabad on Friday evening to have a discussion with Pakistani mediators about a possible second round of negotiations with the U.S.
U.S. oil prices pulled back following the development. U.S. West Texas Intermediate futures settled above $94 per barrel after falling 1.51%. Meanwhile, international benchmark Brent crude futures closed marginally higher at above $105 a barrel.
This comes on the heels of President Donald Trump announcing Thursday that Israel and Lebanon agreed to extend their ceasefire by three weeks. The announcement followed a meeting at the White House with top U.S. officials, Trump said.
“The Meeting went very well!” the president wrote in a Truth Social post. “The United States is going to work with Lebanon in order to help it protect itself from Hezbollah,” he added, referencing the Iran-backed militia group.
The Middle East conflict has evolved into a naval standoff over the Strait of Hormuz as the U.S. and Iran have seized commercial ships. Trump said in a Truth Social post on Thursday that he had ordered the U.S. Navy to “shoot and kill any boat” that is laying mines in the strait.
Robert Conzo, chief executive officer at The Wealth Alliance, believes that regardless of what happens in Islamabad, the market is “almost setting [the conflict] aside and looking right through it,” though headlines coming from the Middle East still can sway the market given Thursday’s reversal from all-time highs for the S&P 500 and Nasdaq.
Because of Trump’s promotion of a short timeline for the conflict, the historically temporary nature of oil supply shocks and a strong start to earnings season, among other factors, the market has become resilient in the face of the war, Conzo noted.
“What it’s basically doing is saying, ‘Okay, these are more short-term things or maybe it’s a lot more talk than what’s really going on, and we’re going to, to set it over here, get back to fundamentals,’” he said. ”[Investors] feel good about those fundamentals, specifically in the United States, and that’s what’s really making the market grind higher.”
The move higher in S&P 500 on Friday was supported by Intel shares, which soared 23.6% to log its best daily gain since October 1987. The chipmaker posted first-quarter earnings that beat Wall Street’s expectations and shared an upbeat forecast for its current quarter.
That adds to the rally semiconductor stocks have seen this week. On Friday, the iShares Semiconductor ETF (SOXX) posted its 18th positive session in a row and ended the week with an 11% gain.
For the three major averages, however, the week was mixed. The S&P 500 ended the period up about 0.6%, while the Dow recorded a 0.4% decline. The Nasdaq rose 1.5% this week.
Rian Howlett and Karen Friar of Yahoo Finance also report the S&P 500, Nasdaq close at record highs as Nvidia retakes $5 trillion mark, Intel finally tops 2000 peak:
US stocks diverged on Friday as semiconductor stocks powered to new highs and the Department of Justice dropped its criminal investigation into Fed Chair Jerome Powell.
The tech-heavy Nasdaq Composite climbed 1.6% to a fresh record as the semiconductor index extended gains for the 18th day in a row.
The S&P 500 added 0.8% to close at a record. Meanwhile, the Dow Jones Industrial Average slipped 0.2% following a losing day for Wall Street stocks.
Tech equities surged as shares of Intel (INTC) jumped to a record high, surpassing their level from the year 2000. The chip giant’s strong outlook and first quarter profit beat was a sign of renewed optimism around the AI trade. Nvidia (NVDA) also closed at a record, re-taking the $5 trillion market cap crown.
Stocks also gained after the DOJ announced it would drop its criminal probe into Chair Powell, potentially clearing the way for the confirmation of President Trump’s pick to lead the Fed, Kevin Warsh.
Meanwhile, the White House indicated President Trump will send special envoy Steve Witkoff and his son-in-law Jared Kushner to Pakistan this weekend for peace talks.
Oil prices edged lower as concerns about a supply squeeze persisted, as tensions around the Strait of Hormuz remain high. Brent crude futures dipped below $100 a barrel, and West Texas Intermediate futures slipped to $95 a barrel.
On the economic data, consumer sentiment improved in April but remained at record lows.
It's Friday, time to talk shop and cover the US stock market (my favourite thing to do).
This week is all about those red-hot semis driving the Nasdaq and S&P 500 to record highs.
Have a look at the top-performing US large cap stocks today, dominated by semis (full list here):
Intel (INTC), Arm Holdings (ARM), Advanced Micro Devices (AMD), Rambus (RMBS), Qualcomm (QCOM) all surged higher today.
Amazingly, Intel just cleared its dot-com-era ceiling after earnings and just smoked short sellers today (it was a buy since David Tepper loaded up at $25 a share, I covered it in
You can say the same thing about the VanEck Semiconductor ETF (SMH), up 5% today and close to 30% over the past month, led by Nvidia and Taiwan Semiconductor which make up 20% and 12% respectively of this index (Broadcom another 8%):
So, Nvidia market cap back above $5T, Alphabet to invest $40B in Anthropic, tech stocks are booming, led by semis once again.
Those weekly up candles above tell me hedge funds, quant funds and CTAs are driving the bulk of the flows, and while I wouldn't chase them here, I certainly wouldn't short these stocks here, that's a surefire way to lose money.
As far as software stocks, they have recovered a bit but continue to struggle this year:
Today on LinkedIn, Bruce Richards, CEO and Cahirman of Marathon Asset Management, posted this:
Has the Software Default Cycle Begun?
One of the largest and smartest private equity managers appears to be handing the keys over to creditors, two years before its scheduled debt maturity; potentially writing off $5.1 billion, or 100% of its equity investment.
This would be the largest private credit default ever, with $3 billion in debt outstanding and owners apparently choosing not to repay principal, instead turning its equity position over to creditors.
Some are calling it a “restructuring,” and for good reason: keeping the company out of Chapter 11 is essential to preserve value. In bankruptcy, software customers grow reticent to stay with a “bankrupt” vendor. A formal filing risks real destabilization since CIOs and CTOs become keenly aware of the risk associated with a software company that may not apply the resources to provide upgrades and essential services, leading to a natural degradation of enterprise value.
Pluralsight had a similar outcome, with $3.5 billion of equity wiped out, as the sponsor turned ownership of the company to its creditors, impairing $1.5 billion in private credit for this software company.
The majority of private credit software defaults, restructurings, and bankruptcies will likely occur in the 2027–2029 timeframe. M3 Partners, with deep industry and restructuring expertise, illustrates the maturity risk of software companies within private credit, data that suggests significant risk as we get closer to the “Maturity Wall” (chart below).
This is not the canary in the coal mine. It is one of the first of many software dominoes that will begin to fall as we enter SaaS-pocalypse.
While I don’t believe that SaaS-pocalypse will create systemic risk to the broader credit markets or the economy, it is becoming increasingly difficult to deny that existential risk has now arrived for many cohorts within the software sector itself. Creative destruction has arrived. To survive, software companies must become AI-first.
Creditors operating in this environment prioritize one thing above all: preserving capital. Yet many assume their software positions are secure, their mindset of a state of denial must be adjusted as it is painful to admit to a massive mistake that cannot be fixed.
Did you get this part: "This is not the canary in the coal mine. It is one of the first of many software dominoes that will begin to fall as we enter SaaS-pocalypse."
Now, it's possible Bruce Richards is talking up his book but what if he's right and SaaS-pocalypse is just beginning?
Moreover, 20,000 job cuts at Meta, Microsoft are raising concerns that AI-driven labor crisis is here.
A lot of moving parts to this economy and I haven't even discussed geopolitics.
One thing is for sure, investors are plowing into semis betting on AI, data centers and ignoring any fallout from Iran or any other concerns.
There is a bit of complacency setting in here, markets are ignoring Iran, for now.
Anyway, an eventful week, so let me end with the chart of the week:
Shares of Avis Budget group (CAR) shot up to $847 earlier this week in what looked to be the Mother-of-all short squeezes but then plunged to close the week at $204.
Absolutely insane price action.
Speaking of insane, the Montreal Canadiens are in overtime again versus Tampa Bay Lightning.
Time to enjoy some hockey and my weekend.
Below, Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street.
Today's guests are Goldman Sachs’ Peter Oppenheimer, Brookings Vice President Ben Harris, D. A. Davidson’s Gil Luria, Vantagescore CEO Silvio Tavares, Interactive Brokers’ Steve Sosnick, 248 Ventures’ Lindsey Bell, Pipeline CEO Katica Roy, Former Federal Reserve Governor Betsy Duke, University of Chicago’s Damon Jones, & Matternet CEO Andreas Raptopoulos.
Also, Dan Niles, founder and protfolio manager at Niles Investment Management, joins 'Squawk on the Street' to discuss Intel's latest earnings report, the impacts of agentic artificial intelligence, and more.
Third, Retired Navy Admiral William McRaven joins 'Squawk Box' to discuss the latest developments in the Iran war, state of U.S.-Iran peace talks, what a potential endgame could look like, takeaways from his new book 'Duty, Honor, Country and Life', and more.
Lastly, Robert Pape, Professor of International Relations at the University of Chicago, joins Rhiannon Jones on TRT World from the United States to assess escalating tensions between Washington and Tehran.
As both sides ramp up military presence and rhetoric, Pape examines the risk of further escalation and whether the situation is heading toward a prolonged standoff. He also discusses the role of mistrust in stalled diplomacy, internal dynamics within Iran’s leadership, and whether there is any realistic path toward de-escalation.
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