(May 29): US stocks edged higher in early trading on Friday, boosted by hopes of a peace deal between the US and Iran and expectations that spending on artificial intelligence will drive further gains in corporate earnings.
The S&P 500 Index opened 0.2% higher, with the index on track for its ninth straight week of gains — a streak that has only been matched four times since 1985. The tech-heavy Nasdaq 100 Index rose 0.3%, while the Dow Jones Industrial Average climbed 0.1%.
Crude oil prices dropped again, with West Texas Intermediate falling to around US$87 a barrel as the US and Iran reached a preliminary deal to extend the ceasefire by another 60 days, though President Donald Trump has yet to agree to terms.
“Risk appetite remains firmly intact as optimism surrounding a potential resolution to the war with Iran continues to improve investor sentiment,” said Adam Turnquist, chief technical strategist at LPL Financial. “While easing geopolitical tensions and an ongoing ceasefire framework have provided a major catalyst for the rally, strong corporate earnings have also played a critical role in sustaining momentum.”
Enthusiasm over AI continues to propel stocks higher. Dell Technologies Inc. shares soared more than 30% after the hardware maker raised its sales outlook well above Wall Street’s consensus view, thanks in large part to US$60 billion ($76.7 billion) in expected revenue from AI servers.
Those gains helped boost a handful of peers, including Hewlett Packard Enterprise and Super Micro Computer.
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“This appears to be the type of market where good news is never fully priced in, and a 50% year-over-year increase in revenues is not deemed cyclical,” said Mike O’Rourke, chief market strategist at JonesTrading Institutional Investor Services LLC, of the Dell release. The company’s shares have already climbed around 160% since its last earnings release in February — even before Friday’s sharp jump.
A handful of Federal Reserve officials also provided optimistic views of the economy and the interest rate path. San Francisco Fed president Mary Daly said the central bank’s rate policy is “in a good place” and she’s “cautiously optimistic” about the economy. Minneapolis Fed president Neel Kashkari said it’s too early to conclude that interest rates need to rise.
Traders also parsed a narrowing of the US merchandise-trade deficit as exports rose. Retail inventories, meanwhile, rose slightly faster than expected.
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Other notable single-stock movers Friday include Costco, which slipped after the wholesaler’s moderating membership growth raised concerns on Wall Street. Gap shares are falling after the company’s Old Navy brand weighed on its full-year outlook.
Uploaded by Magessan Varatharaja
