S&P 500 and Nasdaq notch records, boosted by AI and earnings optimism

NEW YORK - The S&P 500 and the Nasdaq notched record highs on May 8, boosted by gains in Nvidia, Sandisk and other AI-related stocks, while a stronger-than-expected jobs report pointed to labour market resilience.

Nvidia climbed 1.8 per cent, while memory and storage sellers Micron Technology and Sandisk soared more than 15 per cent each, lifted by strong demand from the rapid buildout of AI data centres.

The Philadelphia SE Semiconductor index jumped, bringing its gain so far in the second quarter to 55 per cent.

The S&P 500 and the Nasdaq have surged to record highs this week as investors focused on strong financial reports from US companies, setting aside concerns that high oil prices related to the Middle East conflict are fuelling inflation.

First-quarter S&P 500 earnings are on track to climb almost 29 per cent year-over-year, with much of that growth fuelled by Wall Street’s AI-related heavyweights, according to LSEG I/B/E/S.

“This is an economy that seems hard to wreck,” said Mr Rob Williams, chief investment strategist at Sage Advisory Services in Austin, Texas. “It’s the productivity story, the spending, the consumer wealth effect and the earnings.”

Data showed US employment increased more than expected in April and the unemployment rate held steady at 4.3 per cent, reinforcing expectations that the Federal Reserve would leave interest rates unchanged for some time.

Traders expect the central bank will hold interest rates steady in the 3.5 per cent to 3.75 per cent range until the end of the year.

The S&P 500 climbed 0.84 per cent to end the session at 7,398.93 points. The Nasdaq gained 1.71 per cent to 26,247.08 points, while the Dow Jones Industrial Average rose 0.02 per cent to 49,609.16 points.

The S&P 500 technology index jumped 2.7 per cent, while the utilities sector index fell 0.9 per cent.

The S&P 500 and the Nasdaq notched their sixth straight weekly gains, the longest such winning streak since October 2024. The Dow has logged two consecutive weekly advances.

The S&P 500 has now gained 8 per cent in 2026, while the Nasdaq has rallied 13 per cent.

The earnings optimism helped investors look past fresh attacks between US and Iranian forces in the Gulf.

Brent crude rose above US$100 a barrel as hopes faded for a quick resolution to the Middle East conflict and the gradual reopening of the Strait of Hormuz, a key transit route for oil and liquefied natural gas.

The US said it expected a response from Tehran to its latest proposal later on May 8.

Of the 440 S&P 500 companies that have reported first-quarter results so far, 83 per cent have topped analysts’ earnings estimates, according to LSEG. That compares with a long-term average of about 67 per cent.

However, there have been some earnings disappointments.

Cloudflare plunged 24 per cent after the cloud services company said it would cut about 20 per cent of its workforce and forecast second-quarter revenue slightly below Wall Street expectations.

Trade Desk fell 1.8 per cent after the ad-tech firm forecast second-quarter revenue below Wall Street estimates.

CoreWeave dropped11.4 per cent after the cloud infrastructure technology company raised the lower end of its annual capital expenditure forecast, citing a rise in component costs.

Online travel platform Expedia declined 9 per cent after it flagged that the conflict in the Middle East was hurting demand.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.4-to-one ratio.

The S&P 500 posted 28 new highs and 30 new lows; the Nasdaq recorded 134 new highs and 119 new lows.

Volume on US exchanges was relatively light, with 17.2 billion shares traded, compared to an average of 17.6 billion shares over the previous 20 sessions. REUTERS