The S&P 500 advanced while the Nasdaq Composite touched an intraday record on Friday, supported by renewed hopes of negotiations between the United States and Iran, alongside a sharp rally in Intel shares.
Iran’s foreign minister, Abbas Araghchi, was expected in Islamabad to discuss proposals for restarting peace talks, according to Pakistani government sources.
Geopolitical Tensions Still in Focus
The gains came at the end of a week marked by continued tensions, with the US maintaining a naval blockade of Iranian ports and Iran seizing ships attempting to pass through the Strait of Hormuz.
“Both sides are incentivized to end this quickly. They want to move on. It’s just going to take time and so we’re trying not to get too focused on the day-to-day changes,” said Jack Herr, senior investment analyst at GuideStone Funds.
Semiconductor Stocks Lead the Rally
Technology stocks, particularly semiconductors, remained a key source of market strength.
The Philadelphia SE Semiconductor Index rose 4.3%, extending its winning streak to 18 sessions. Intel surged 23.4% to a record high after issuing a stronger-than-expected second-quarter revenue forecast.
Rivals Advanced Micro Devices and Arm Holdings climbed over 15% each, while Nvidia gained 5% and was on track for a record close.
The information technology index rose 2.3%, providing the largest boost to the broader market, even as tech stocks brushed aside concerns over DeepSeek’s upcoming model preview.
Key Index Levels
At 11:52 AM ET, the Dow Jones Industrial Average fell 85.40 points, or 0.17%, to 49,224.92, the S&P 500 gained 53.25 points, or 0.75%, to 7,161.65, the Nasdaq Composite rose 365.49 points, or 1.50%, to 24,804.12 and the S&P 500 and Nasdaq were on track for their fourth consecutive week of gains, their longest streak since October 2024. The Dow, however, was set to snap a three-week winning run.
Focus Shifts to Federal Reserve
Investor attention is turning to the upcoming Federal Reserve meeting, which will be closely watched for signals on interest rate cuts and leadership changes.
The U.S. Department of Justice is closing its investigation into Fed Chair Jerome Powell, removing a potential hurdle to the confirmation of Kevin Warsh, President Donald Trump’s nominee to lead the central bank.
Rate futures indicate a 34% probability of easing by year-end, up from about 23% late Thursday, according to LSEG estimates.
Oil Prices Remain a Key Risk
Despite the rally, oil prices continue to weigh on sentiment. Brent crude futures remain around 44% above pre-war levels due to disruptions in the Strait of Hormuz.
Still, some strategists see the recent pullback as an opportunity.
“U.S. equities are seen as more immune to the oil shock than other countries. The magnitude of oil price movement itself is much lower now, comforting equity investors,” said Manish Kabra, US equity strategist at Societe Generale.
Market Breadth Positive
Advancing stocks outpaced decliners by a 1.42-to-1 ratio on the NYSE and 1.37-to-1 on the Nasdaq.
The S&P 500 recorded 32 new 52-week highs and four new lows, while the Nasdaq Composite posted 96 new highs and 65 new lows.
