S&P 500 and Nasdaq notch records as AI chip stocks surge

[BENGALURU] The S&P 500 and Nasdaq notched record high closes on Tuesday (May 5), lifted by Intel and other artificial intelligence-related stocks, as a US-Iran ceasefire held firm and investors focused on strong quarterly earnings.

Washington said on Tuesday that its ceasefire with Iran was intact, allaying worries that attempts by both sides to assert control over the Strait of Hormuz would escalate hostilities.

Investors focused on AI-related companies, and chip designer AMD rallied 4 per cent ahead of its quarterly report after the bell, with analysts expecting a 33 per cent surge in revenue. Intel surged 13 per cent after Bloomberg News reported that Apple had held exploratory discussions about enlisting the company’s chipmaking services to produce the main processors for its devices.

The PHLX chip index jumped 4.2 per cent to a record high, and the index is now up 55 per cent in 2026.

S&P 500 companies are on track to post aggregate earnings growth of 28 per cent year over year for the first quarter, the strongest quarterly profit growth since 2021, according to Tajinder Dhillon, head of earnings research at LSEG.

Wall Street’s AI heavyweights account for much of that optimism.

“Markets are following fundamentals. Earnings are coming in pretty strong, and the expectation is that will carry forward into the rest of the year,” said Tom Hainlin, an investment strategist at US Bank Wealth Management in Minneapolis.

“Business spending remains strong, whether it’s on AI or other productivity tools, and consumers continue to spend,” Hainlin said.

The S&P 500 climbed 0.81 per cent to end the session at 7,259.22 points.

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The Nasdaq gained 1.03 per cent to 25,326.12 points, while the Dow Jones Industrial Average rose 0.73 per cent to 49,298.25 points.

All 11 S&P 500 sector indexes rose, led by materials, up 1.67 per cent, followed by a 1.63 per cent gain in information technology.

Brent crude futures fell but still traded at US$110 a barrel.

Data on Tuesday showed US job openings dropped to 6.866 million in March, slightly above the 6.835 million estimate. That reinforced the view that labour market resilience could give the central bank room to keep interest rates higher for longer.

The Institute for Supply Management’s Non-Manufacturing Purchasing Managers’ Index for April came in at 53.6, narrowly missing the estimate of 53.7, according to economists polled by Reuters. Grain trader Archer-Daniels-Midland rose 3.8 per cent after reporting better-than-expected first-quarter profit on higher margins.

DuPont rallied 8.4 per cent after the industrial materials maker lifted its annual profit forecast. Shares of Pinterest soared 6.9 per cent after the image-sharing platform forecast second-quarter revenue above analysts’ estimates.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.7-to-one ratio.

The S&P 500 posted 43 new highs and 23 new lows; the Nasdaq recorded 160 new highs and 79 new lows.

Volume on US exchanges was relatively light, with 16.1 billion shares traded, compared to an average of 17.7 billion shares over the previous 20 sessions. REUTERS