The S&P 500 and Nasdaq surged to record closing highs on Friday, boosted by robust profits and a decline in crude prices, and turning the page for their biggest monthly percentage gains in years.
The S&P 500 joined the Nasdaq in positive territory, with technological strength putting the latter in the lead. Both indexes recorded their sixth consecutive weekly rise, their longest streak of weekly gains since October 2024.
At the start of May, the stock market embarks on what is historically a weak six-month period. From 1945 to April 2026, the S&P 500 gained an average of about 2% from May to October, according to Fidelity data. That compares to an average gain of about 7% from November to April.
Coming off a momentous week for corporate earnings, in which reporting companies accounted for more than two-fifths of the S&P 500’s total market capitalization, analysts now forecast overall first-quarter earnings growth of 27.8 percent, year-over-year, according to LSEG I/B/E/S.
Five of the Magnificent Seven group of AI-related stocks reported this week, and investors have been paying close attention to the timing and extent to which huge investments in the nascent technology begin to pay off.
This represents an increase of 11.7 percentage points from the estimate a week ago and marks the strongest earnings growth since the fourth quarter of 2021.
Of the 314 companies that reported results, 83% beat earnings estimates and 78% reported better-than-expected revenue, according to LSEG.
“Today’s action is really the icing on the cake of another strong week for investors as earnings season continues to be stronger than expected,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “At the same time, we had the second best April for the S&P 500 since 1950.”
“It looks like this bullish momentum could very well continue into May,” Detrick added.
GEOPOLITICS, CRUDE PRICES AND ECONOMY
Progress toward a peaceful resolution to the U.S.-Israeli war with Iran appears to have stalled, with the closure of the Strait of Hormuz putting upward pressure on energy prices and stoking inflationary concerns.
But front-month crude futures eased after Iran reportedly submitted a new proposal for talks with Washington.
“Investors are evaluating how long they expect this supply disruption to last, and then differentiating who is most susceptible to that disruption,” said Tom Hainlin, national investment strategist at US Bank Wealth Management in Minneapolis.
Economic data showed that U.S. factory activity increased in April for the fourth straight month, but the prices paid component – a gauge of inflation – rose to its highest level in four years, according to the Institute for Supply Management.
According to preliminary data, the S&P 500 gained 20.46 points, or 0.28%, to end at 7,229.47 points, while the Nasdaq Composite gained 217.67 points, or 0.87%, to 25,109.98. The Dow Jones Industrial Average fell 155.67 points, or 0.31%, to 49,496.47.
Apple shares rose after the company provided strong sales guidance, touting strong demand for its flagship iPhone 17 and the MacBook Neo.
Shares of Atlassian jumped after the enterprise software company raised its forecast.
Peers Salesforce and ServiceNow also gained ground.
Roblox fell following a drop in its annual bookings forecast. Reddit jumped after optimistic quarterly revenue forecasts.
Exxon Mobil’s quarterly profit was hurt by disruptions in the Middle East, while Chevron beat expectations, but overall profit marked its lowest level in five years. Both supermajors closed lower.
