U.S. equities finished the week at record highs, with the S&P 500 rising 0.80% to 7,165.08 and the Nasdaq gaining 1.63% to 24,836.60.

Both indices posted a fourth consecutive week of gains, up 0.55% and 1.5% respectively. The Dow slipped 0.44%, underscoring that the advance remains concentrated in technology.

Geopolitical Signals Ease Without Resolving

Markets responded to incremental diplomatic movement around Iran. Iranian Foreign Minister Abbas Araqchi was heading to Islamabad for talks, with U.S. envoy Steve Witkoff and Jared Kushner scheduled to follow in Pakistan-mediated discussions.

The Strait of Hormuz remains closed and energy supply risk has not been removed from the macro backdrop. Equities repriced reduced escalation risk, not a resolution. That distinction explains why the rally is supported but not fully anchored.

Semiconductors Extend Leadership

The Philadelphia Semiconductor Index extended its win streak to 18 consecutive sessions. Intel surged 23.65% after issuing a stronger-than-expected second-quarter revenue forecast, acting as a repricing event for AI capital expenditure returns across the sector.

Nvidia gained 4.32% to another record close, again approaching a $5 trillion valuation. AMD and Arm Holdings each added roughly 14%.

Skepticism around whether AI infrastructure spending from Amazon, Microsoft, Meta, and Alphabet would generate sufficient returns is fading, and equity prices are reflecting that shift.

Breadth Remains Narrow

Advancers outnumbered decliners on both the NYSE and Nasdaq, but not by a margin that signals broad participation.

Technology was the session’s best-performing segment while other sectors moved sideways. The gap between the S&P 500 and the Dow reinforces that a small group of large-cap technology and semiconductor names is carrying the index. Narrow leadership increases sensitivity to any reversal in that group.

Fed Policy and Earnings in Focus

Markets are pricing roughly a 39% probability of a Federal Reserve rate cut by December, up from 23% in the prior session, according to current futures positioning.

The U.S. Justice Department has closed its investigation into Fed Chair Jerome Powell, clearing a potential obstacle to the eventual appointment of Kevin Warsh as a successor candidate.

On earnings, first-quarter growth expectations have risen to 16.1%, up from 14.4% earlier in April, according to LSEG – providing a fundamental floor for valuations that might otherwise look stretched in high-growth segments.

Source: Free Malaysia Today