The S&P 500 rose to end just short of a record high on Friday, as a blockbuster Nasdaq debut of South Korea’s SK Hynix fueled optimism about memory-chip makers, while investors looked ahead to quarterly earnings season kicking off next week. Canada’s main stock index rose to its highest level in more than three weeks, with investors cheering Aritzia’s earnings report and after domestic data showed the economy adding more jobs than expected last month.
The artificial intelligence trade returned to the spotlight after SK Hynix ended 13% above its offering price at US$170 in a high-profile U.S. listing. The semiconductor company raised over US$26 billion on Thursday by selling American Depositary Receipts priced at US$149 each. U.S. stocks added to gains after U.S. President Donald Trump said that Iran had asked to continue talks and the U.S. had agreed, but that the June ceasefire was “over.”
Attacks between the U.S. 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 U.S. banks will kick off the second-quarter earnings season next week. Analysts are expecting S&P 500 earnings to surge 24% 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 U.S. 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.
Chipmakers have been among the biggest beneficiaries of this year’s AI-driven rally, fueled 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% to end the session at 7,575.39 points. It remains down 0.45% from its June 2 record-high close.
The Nasdaq gained 0.29% to 26,281.61 points, while the Dow Jones Industrial Average rose 0.29% to 52,637.01 points.
Eight of the 11 S&P 500 sector indexes rose, led by information technology, up 1.65%, followed by a 1.46% gain in consumer discretionary.
The PHLX chip index gained 0.06%, up for a third straight day.
For the week, the S&P 500 added 1.2%, the Nasdaq climbed 1.7% and the Dow fell 0.5%.
Meta Platforms jumped 6% to its highest level since April.
Moderna tumbled almost 11% 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%, even after forecasting third-quarter profit above expectations.
The Toronto Stock Exchange’s S&P/TSX Composite index ended up 104.86 points, or 0.3%, at 35,305.31, marking the highest closing level since the index posted a record high on June 16. For the week, the index was up 0.1%, its third straight week of gains.
“I still think that we should have a pretty good earnings season,” said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James. “You are seeing the higher-income consumers doing well and the lower-income consumers facing pressures from higher inflation, higher rates, a somewhat weaker economy in Canada.”
The Canadian economy entered into a technical recession in the first quarter, dragged down by trade uncertainty, but data on Friday added to signs of recovery in the labor market. The economy added a net 18,200 jobs in June and the unemployment rate edged down to 6.5%, slightly beating estimates and continuing the momentum seen in the prior month.
Shares of Aritzia Inc rose 7.4% after the fashion retailer beat first-quarter revenue estimates, which helped lift the consumer discretionary index by 1.5%.
Consumer staples was another standout, adding 1.2%, while heavily weighted financials were up 0.9% and technology ended 0.6% higher.
Shopify has told customers using its web-hosting services to remove vape products from their online stores, according to a notice seen by Reuters and confirmed by the company. Shares of Shopify lost 0.5%, while the materials group, which includes metal mining shares, was another drag on the market, falling 0.6%.
The price of gold edged lower as higher oil prices linked to the Middle East conflict fueled inflation concerns and bolstered expectations of tighter U.S. monetary policy.
Advancing issues outnumbered falling ones within the S&P 500 by a 2.1-to-one ratio.
Volume on U.S. exchanges was relatively light, with 14.5 billion shares traded, compared with an average of 22.4 billion shares over the previous 20 sessions.
Reuters, Globe staff