The Dow Jones Industrial Average reached a record high on Friday, buoyed by optimism over potential progress in U.S.-Iran relations and the swearing-in of Kevin Warsh as the new Federal Reserve chair.
The S&P 500 notched its eighth consecutive weekly gain, marking its longest winning streak since December 2023. Semiconductor stocks, particularly Qualcomm, contributed to the gains, although Nvidia saw a slight decline.
The Philadelphia Semiconductor Index rose, reflecting the sector's overall strength. Meanwhile, U.S. computer makers experienced a surge in shares following Lenovo Group's impressive 27% jump in quarterly revenue, with Dell Technologies hitting a record high and HP Inc gaining.
“Earnings season looked really good and the economic data, save a few outliers, looked pretty solid so fundamentally the picture looks really solid.”
James St. Aubin, Chief Investment Officer at Ocean Park Asset Management
Long-dated government bond yields fell, with the benchmark U.S. 10-year notes yield decreasing by 2.6 basis points to 4.558%. This decline in yields suggests a cooling bond market, which is seen as a positive development.
Estee Lauder shares rose after ending merger talks with Spanish perfumery Puig, while Workday's stock gained following better-than-expected first-quarter results.
“The bond market seems to be cooling off and yields are coming down from where they were starting to peak earlier this week and I think that's very encouraging too.”
James St. Aubin, Chief Investment Officer at Ocean Park Asset Management
Background
The U.S. has made some progress toward a deal with Iran, though significant differences remain, according to Secretary of State Marco Rubio. The geopolitical developments, along with Warsh's leadership at the Fed, are pivotal as higher gasoline prices linked to the Iran conflict continue to impact inflation and consumer sentiment.
Looking ahead, investors will be closely monitoring further developments in U.S.-Iran negotiations and the Federal Reserve's policy direction under Warsh's leadership, as these factors will likely influence market dynamics in the coming weeks.
