Much of the upward move was driven by artificial intelligence (AI) related names, with a notable jump from Advanced Micro Devices after it forecast second quarter growth above expectations. Meanwhile rival Intel also climbed to a record high amid the AI enthusiasm, and SanDisk added to its year-to-date outperformance.
For the week the S&P 500 added 2.3% while the tech-heavy Nasdaq Composite jumped 4.5%, with both indices ending at record highs and logging a six-week winning streak. Meanwhile the Dow Jones Industrial Average saw more limited movement, rising just 0.2% for the week. While tech stocks led gains, energy was the weakest performer due to declining oil prices, tracking the situation in the Middle East. Brent crude fell 6.4% but remained above $100 a barrel. The US dollar notched a second weekly decline on hopes for a de-escalation in geopolitical tensions. In addition, the latest monthly jobs report was robust, reinforcing expectations that the Federal Reserve would remain on hold for now. US Treasury yields moved lower, with the 10-year note ending at 4.37%.
European markets eked out a slight gain in a volatile week, remaining sensitive to Middle East developments. Overall, the pan-European STOXX 600 ended marginally above the flatline. The index had jumped over 2% on Wednesday as investors welcomed a possible US-Iran peace deal, plus positive corporate earnings, however by the end of the week the market was more wary of flaring geopolitical tensions, pulling back gains. In addition, President Trump’s threat of higher tariffs on EU goods if trade commitments were not met also added pressure. Regional indices were mixed, with Italy’s FTSE MIB amongst the strongest gainers, the French index little changed, while the UK FTSE 100 dropped 1.3%.
It was a short trading week for Japanese equities, with markets being closed Monday through to Wednesday, however in the two sessions they were open they managed to log strong gains. The Nikkei 225 gained 5.4% and hit a fresh record high, fuelled by a rally in technology stocks. The Japanese yen ended the week little changed against the US dollar however earlier in the week it had experienced weakness, prompting speculation that authorities had intervened in currency markets to prop up the yen. Chinese markets also experienced a holiday-shortened week, but were positive, supported by positive economic data. In addition, there were hopes that this week’s meeting between Presidents Xi and Trump would not prompt a deterioration in relations.