- The S&P 500 Index and the Nasdaq Composite Index closed at 7398.93 points and 26247.08 points, respectively, reaching new historical highs. Both recorded gains for the sixth consecutive week, marking the longest streak since October 2024, with year-to-date increases of 8% and 13%, respectively.
- The Philadelphia Semiconductor Index surged by 5.51%, with a cumulative gain of 55% for the second quarter. Boosted by the demand for underlying hardware in AI data centers, Micron Technology and SanDisk both saw single-day gains exceeding 15%, while Nvidia also recorded a 1.75% increase.
- In April, the U.S. added more jobs than expected, with the unemployment rate stabilizing at 4.3%. Coupled with the S&P 500 components' first-quarter earnings expected to grow nearly 29% year-on-year, the market temporarily absorbed the phase of inflation concerns brought by Brent crude oil returning above $100 per barrel.
Core Technology Drivers and Corporate Earnings Reassessment
The current upward momentum in the U.S. stock market shows a strong concentration in specific sectors. According to data compiled by the London Stock Exchange Group (LSEG), among the 440 S&P 500 components that have reported first-quarter earnings, a remarkable 83% exceeded analysts' expectations, significantly higher than the long-term historical average of 67%. This earnings surprise is primarily driven by tech giants at the core of the AI industry chain. The S&P 500 Technology Index rose sharply by 2.7% in a single day, reflecting the secondary market's rapid conversion of AI technology's long-term commercialization potential into current valuation premiums. If related companies continue to maintain high growth in their upcoming capital expenditure guidance, the valuation center of the Nasdaq Composite Index is likely to receive further support.
Labor Market Characteristics and Interest Rate Path Pricing
Beyond strong corporate earnings, the resilience of the U.S. macroeconomic fundamentals provides a solid bottom support for risk assets. The unexpected expansion of jobs in April and the 4.3% unemployment rate confirm the strategists at Wise Consulting Services' judgment of a positive cycle formed by consumer spending and productivity improvements. Based on this macro data combination, fixed income markets and interest rate derivatives traders quickly adjusted their policy expectations for the Federal Reserve (Fed). The current mainstream consensus expects the Fed to maintain the target range for the benchmark interest rate at 3.50% to 3.75% for the year. This "high growth, stable interest rate" macro environment has historically been a fertile ground for equity assets to achieve excess returns.
Dulled Risk Aversion and Pressure on Non-Tech Sectors
Despite the overall stock indices repeatedly reaching new highs, the structural divergence within the market remains severe. Against the backdrop of a new round of conflict in the Gulf region, Brent crude oil futures prices have once again surpassed the $100 mark, highlighting the potential supply chain risks posed by disruptions in the Strait of Hormuz. However, mainstream funds have chosen to temporarily ignore this geopolitical tail risk, leading to a 0.9% decline in traditional defensive sectors like the Utilities Index. Meanwhile, companies highly dependent on macroeconomic stability are beginning to show signs of performance fatigue. Online travel platform Expedia Group (EXPE:US) saw its stock price significantly drop by 9% due to the substantial impact of Middle East conflicts on travel demand. This indicates that if energy inflation caused by geopolitical frictions becomes prolonged, cyclical and non-essential consumer sectors lacking AI concept support may face more stringent valuation corrections.
