New York, May 10, 2026, 13:03 EDT
Friday saw the S&P 500 notch a new closing high, up 0.84% at 7,398.93, while the Nasdaq surged 1.71% to 26,247.08—both lifted by a run in AI chip stocks and unexpectedly strong U.S. jobs data. The Dow edged up too, finishing just 0.02% higher at 49,609.16.
The timing feels crucial with a packed week ahead: CPI, producer prices, and retail sales are all on deck. Investors are also watching the Iran conflict and the anticipated Trump-Xi meeting. According to Reuters, the S&P 500 has rallied more than 16% off its late-March bottom, boosted by the strongest U.S. quarterly earnings in over four years.
The jobs data landed as the day’s standout mover. Nonfarm payrolls climbed by 115,000 in April, while joblessness held steady at 4.3%, according to the Bureau of Labor Statistics. “Nothing in this report to move the Fed off the sidelines” on rate cuts, said Scott Anderson, chief U.S. economist at BMO Capital Markets. Reuters
Chips carried the load Thursday. Nvidia added 1.8%. Micron Technology and Sandisk surged—both up over 15%—as investors piled into AI data center plays. The Philadelphia SE Semiconductor Index, tracking major chip stocks, is now up 55% for the second quarter.
Rob Williams, Sage Advisory Services’ chief investment strategist, dubbed this “an economy that seems hard to wreck,” nodding to healthy productivity, resilient spending, consumer wealth, and earnings. That take sums up the prevailing market view: growth holds steady, profits remain robust, and the Fed hasn’t needed to tighten policy further just yet. Reuters
Bloomberg pointed to both robust labor-market data and a resurgent AI theme behind the move, noting that an index tracking chipmakers surged 11% since the prior Friday. Oil, on the other hand, slipped over the week, despite ongoing mediated efforts by the U.S. and Iran to hammer out a path toward ending the conflict.
The rally’s still looking narrow, leaving risk on the table. Shares of Cloudflare plunged 24% after the company announced plans to slash around 20% of staff and dialed back its revenue guidance for Q2. Over at CoreWeave, the stock slipped 11.4% as the company lifted the lower end of its capital spending forecast, citing pricier components. Expedia dropped 9%, pointing to softer demand tied to the conflict in the Middle East.
Energy’s still under pressure. Iran delivered its answer to the U.S. proposal on Sunday, IRNA reported, but Reuters noted this round of diplomacy is focused on a short-term memorandum of understanding—one that would pause hostilities and keep the Strait of Hormuz open as longer-term talks continue.
Stocks aren’t catching much of a break from rates, either. Last week, Cleveland Fed President Beth Hammack signaled “interest rates will be on hold for quite some time,” cautioning that inflation expectations could get locked in for both businesses and consumers. With the market sitting at new highs, next week’s inflation numbers suddenly loom larger. Reuters
Wall Street can’t afford much of a misstep right now. “Earnings are the lifeblood of this rally,” said Michael Arone, chief investment strategist at State Street Investment Management. Kristina Hooper at Man Group pointed out markets have paid attention to “only the positive.” But if core CPI — which leaves out food and energy — comes in hotter than expected, those views could get challenged in a hurry. Reuters
