U.S. equity markets concluded the trading week on a high note, with the S&P 500 and Nasdaq Composite reaching new all-time highs on Friday. Both indexes also extended their impressive weekly winning streaks to six consecutive weeks, a feat not seen since 2024. The S&P 500 advanced 0.84% to close at 7,398.93, while the tech-heavy Nasdaq Composite surged 1.71% to 26,247.08. The Dow Jones Industrial Average also saw a modest gain, ticking up 0.02% to settle at 49,609.16. All three major averages registered weekly gains, propelled by a combination of robust economic data and strong corporate earnings, even as geopolitical tensions in the Middle East introduced an element of caution.

Investor sentiment received a significant boost from a better-than-anticipated April jobs report. Nonfarm payrolls increased by 115,000 last month, substantially exceeding economists’ expectations of 55,000. The U.S. jobless rate remained steady at 4.3%, aligning with forecasts and indicating a stable labor market. This positive economic backdrop, coupled with a string of strong corporate earnings, particularly from the technology sector, fueled the market’s ascent. The Nasdaq saw a 4.5% climb for the week, while the S&P 500 gained 2.3%. The ongoing enthusiasm surrounding artificial intelligence (AI) capital expenditures further galvanized the market, leading to significant rallies in memory and chip stocks. Micron Digital Systems and Sandisk, for instance, saw their shares jump 15% and 16% respectively on Friday alone, with Micron’s market capitalization surpassing $800 billion. Advanced Micro Devices (AMD) also crossed the $700 billion market cap threshold after an earnings beat, reflecting the intense demand for chips driving the AI infrastructure buildout.

Despite the domestic economic strength, the markets navigated renewed geopolitical friction between the U.S. and Iran. Both nations reported exchanging fire in the Strait of Hormuz, with the U.S. military confirming strikes on two Iran-flagged oil tankers in the Gulf of Oman, citing self-defense and preventing their entry into an Iranian port. U.S. President Donald Trump commented on the incidents, stating that U.S. destroyers sustained “no damage” while Iranian attackers suffered “great damage,” describing the strikes as a “love tap” and confirming a ceasefire remained in effect. However, an Iranian official reportedly indicated that Tehran would not allow the U.S. to reopen the Strait of Hormuz with an “unrealistic plan” and demanded reparations. The escalating tensions led to a marginal rise in West Texas Intermediate crude futures to $95.42 per barrel, with some analysts expressing concerns about “demand destruction” if higher energy prices persist. This uncertainty contributed to a notable drop in consumer sentiment in early May, hitting a new record low, largely attributed to surging gas prices. Skepticism about the market’s current rally, particularly its reliance on AI optimism and the potential for a prolonged Middle East conflict, was voiced by some investment strategists, with one comparing the current AI fixation to the final stages of the dot-com bubble.