The S&P 500 and Nasdaq have closed at record highs, bolstered by optimism for possible negotiations between the United States and Iran to end their war and a surge in Intel shares that extended the rally in semiconductor stocks.
Pakistani government sources said Iranian Foreign Minister Abbas Araqchi was expected in the Pakistani capital Islamabad on Friday to discuss proposals for restarting talks.
In addition, White House Press Secretary Karoline Leavitt said in an interview with Fox News that President Donald Trump’s special envoy Steve Witkoff and son-in-law Jared Kushner will travel to Islamabad on Saturday morning for talks with Iran mediated by Pakistan.
Markets had rallied in recent weeks on hopes that a resolution to the Iran war was on the horizon, along with expectations of strong corporate earnings, but gains have been tempered this week as optimism for a peace deal dimmed and the Strait of Hormuz remained shuttered.
“The Iran thing feels kind of tenuous, we’ve had a lot of back and forth. I assume that will continue, but for now, some rays of sunlight,” said Jed Ellerbroek, portfolio manager at Argent Capital Management in St Louis, Missouri.
The Dow Jones Industrial Average fell 79.61 points, or 0.16 per cent, to 49,230.71, the S&P 500 gained 56.68 points, or 0.80 per cent, to 7,165.08 and the Nasdaq Composite gained 398.09 points, or 1.63 per cent, to 24,836.60.
For the week, the S&P 500 gained 0.55 per cent, the Nasdaq rose 1.5 per cent and the Dow fell 0.44 per cent.
Semiconductors, one of the market’s strongest performers on the year, continued to rally.
The Philadelphia SE Semiconductor Index advanced 4.32 per cent to extend its record run of gains to 18 consecutive sessions.
Intel surged 23.65 per cent to close at a record $US82.57 and was the best performer on the benchmark S&P index following a better-than-expected revenue forecast for the second quarter.
“All the doubts and fears about the (return on investment) on the AI CapEx from the big tech companies – Amazon and Google and Microsoft and Meta – those concerns are fading real fast, and that’s propelling the chip stocks and the contractors and all the industrial companies,” Ellerbroek said.
Fellow chipmakers AMD and Arm both shot higher by about 14 per cent.
Megacap Nvidia climbed 4.32 per cent and also closed at a record as it neared the $US5 trillion ($A7 trillion) market valuation again.
The S&P 500 technology index rose 2.46 per cent and was the best-performing of the 11 major S&P sectors.
Tech stocks also managed to shrug off DeepSeek’s preview of its highly awaited new model.
The S&P 500 and the Nasdaq recorded a fourth consecutive week of gains, their longest streak since the fourth quarter of 2024.
The Dow, however, snapped a three-week run higher.
Attention is also shifting to the Federal Reserve meeting next week, which will be scrutinised for clues on rate cuts and the central bank’s leadership succession.
The US Justice Department is closing its investigation into Fed chair Jerome Powell, clearing an obstacle to the confirmation of Kevin Warsh, Trump’s pick to lead the central bank.
Markets were pricing in a roughly 39 per cent chance for a cut of at least 25 basis points at the Fed’s December meeting, according to CME’s FedWatch Tool, up from about 23 per cent in the prior session.
A strong start to earnings season has helped buttress stocks against volatile Iran news.
Earnings growth expectations for the first quarter stand at 16.1 per cent, according to LSEG data, up from 14.4 per cent at the start of April.
Advancing issues outnumbered decliners by a 1.47-to-1 ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq.
The S&P 500 posted 34 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 126 new highs and 90 new lows.
Volume on US exchanges was 17.81 billion shares, compared with the 18.39 billion average for the full session over the last 20 trading days.