The S&P 500 has risen to end just short of a record high as a blockbuster Nasdaq debut of South Korea’s SK Hynix fuelled optimism about memory-chip makers, while investors looked ahead to quarterly earnings season kicking off next week.
The artificial intelligence trade returned to the spotlight after SK Hynix ended 13 per cent above its offering price at $US170 in a high-profile US listing.
The semiconductor company raised more than $US26 billion ($A37 billion) on Thursday by selling American Depositary Receipts priced at $US149 each.
Sign up to The Nightly’s newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.
US stocks added to gains after US President Donald Trump said that Iran had asked to continue talks and the US had agreed but that the June ceasefire was “over”.
Attacks between the US and Iran this week revived concerns that high energy prices could fuel more inflation and force the Federal Reserve to hike interest rates.
Reports from big US banks will kick off the second-quarter earnings season next week.
Analysts are expecting S&P 500 earnings to surge 24 per cent from a year earlier, with technology companies driving much of the growth, according to LSEG I/B/E/S.
“This is a high-bar quarter with a narrow margin of error,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, Minnesota.
“The banks will give us a good read on the underlying economic strength and what consumers and businesses are doing.”
Thanks to increased corporate profit estimates, the S&P 500 is trading at about 20 times expected earnings, down from an earnings multiple of 21 in late May, even though the benchmark is trading near record highs.
Chip makers have been among the biggest beneficiaries of this year’s AI-driven rally, fuelled by expectations of heavy spending by hyperscalers.
But concerns over stretched valuations and profit taking have recently injected volatility into the sector.
The S&P 500 climbed 0.42 per cent to end the session at 7,575.39 points.
It remains down 0.45 per cent from its June 2 record-high close.
The Nasdaq gained 0.29 per cent to 26,281.61 points while the Dow Jones Industrial Average rose 0.29 per cent to 52,637.01 points.
Eight of the 11 S&P 500 sector indexes rose, led by information technology, up 1.65 per cent, followed by a 1.46 per cent gain in consumer discretionary.
The PHLX chip index gained 0.06 per cent, up for a third straight day.
For the week, the S&P 500 added 1.2 per cent, the Nasdaq climbed 1.7 per cent and the Dow fell 0.5 per cent.
Meta Platforms jumped 6.0 per cent to its highest level since April.
Moderna tumbled almost 11 per cent in its worst day in over a year.
Next week’s June inflation data will offer fresh insight into the Fed’s likely monetary policy path, while Fed chair Kevin Warsh is also scheduled to testify before the House Committee on Financial Services.
Delta Air Lines dropped 1.8 per cent, even after forecasting third-quarter profit above expectations.
Advancing issues outnumbered falling ones within the S&P 500 by a 2.1-to-one ratio.
Volume on US exchanges was relatively light, with 14.5 billion shares traded, compared with an average of 22.4 billion shares over the previous 20 sessions.
