Dow Hits Another Record as AI Hardware Stocks Go Nuclear
MarketDash
Dell, Qualcomm and HP power an AI-fueled rally to send the Dow to record highs. Nasdaq 100 and S&P 500 eyes eighth straight week of gains.
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U.S. stocks pushed higher by midday Friday, with the Dow Jones Industrial Average punching to a fresh record high as a powerful AI-led rally in chip and PC names overpowered another shock to consumer sentiment.
The S&P 500 and Nasdaq 100 are now on track for an eighth straight weekly gain — the longest winning streak since 2023 — as diplomatic signals on Iran helped cool oil and pulled Treasury yields lower for a third consecutive session.
The S&P 500 climbed 0.4% to 7,477 by 11 a.m. ET, while the Dow Jones Industrial Average advanced 324 points, or 0.6%, to a record 50,610, led by Merck & Co. Inc. (MRK), +4.7%; Caterpillar Inc. (CAT), +3.7% and IBM (IBM), +2.8%. The latter is on track for its best week in over two decades.
The Nasdaq 100 added 0.2% to 29,417, dragged by a soft session within Magnificent Seven stocks. NVIDIA Corp. (NVDA) slipped 1.2% as traders continued to digest a first-quarter report that beat headline estimates but delivered revenue guidance that did not exceed the upper end of analyst expectations. Microsoft Corp. (MSFT) and Alphabet Inc. (GOOGL) each slipped less than 0.5%.
The Russell 2000 outperformed, rising 0.9% as small caps caught a tailwind from falling yields.
The University of Michigan consumer sentiment index was revised to a record low 44.8 in May from a preliminary 48.2, a third straight monthly drop blamed on Hormuz-driven gasoline costs.
One-year inflation expectations were nudged up to 4.8% and five-year expectations to 3.9% — the highest in seven months — keeping a hawkish overlay on every Fed headline.
The bond market now assigns an 82% probability of a rate hike by year's end.
AI Hardware Rips Higher As Dell, Qualcomm and HP Power Tech Comeback
The session belonged to the AI hardware trade. The Technology Select Sector SPDR Fund (XLK) led the S&P 500 sector tape, with semiconductors and PC names doing the heavy lifting.
Dell Technologies Inc. (DELL) was the top Russell 1000 gainer, surging 15.12% to a record high near $291 after Morgan Stanley raised its price target ahead of Dell's May 28 fiscal first-quarter print, citing a record $43 billion AI server backlog and projected fiscal 2027 EPS of $11.90.
The setup spilled directly into HP Inc. (HPQ), which jumped 13.90% as traders positioned ahead of next week's earnings on hopes the AI PC cycle is finally translating into hardware demand.
Qualcomm soared 12.48% after announcing an expanded multi-year Snapdragon Digital Chassis partnership with Stellantis N.V. (STLA) for next-generation vehicle cockpit, connectivity and ADAS chips, layered on top of last month's Q2 beat that featured a dividend hike and an expanded buyback.
Zoom Communications Inc. (ZM) rallied 12.14% after reporting on Thursday a first-quarter fiscal 2027 EPS of $1.55 versus a $1.42 consensus and revenue of $1.24 billion versus $1.22 billion expected, raising full-year revenue guidance to $5.08-5.09 billion and authorizing an incremental $1 billion buyback.
The flip side of the tape was a sharp rotation out of defensives and certain post-earnings disappointments. The Consumer Staples Select Sector SPDR Fund (XLP) lagged as Costco Wholesale Corp. (COST) slid 2.2%, Walmart Inc. (WMT) dropped another 1.6%, extending Thursday's slide on the fuel-cost warning, and McDonald's Corp. (MCD) fell 1.3%.
On the corporate front, BJ's Wholesale Club Holdings Inc. (BJ) was the worst large-cap performer, plunging 8.10% even as first-quarter adjusted EPS of $1.10 beat the $1.03 consensus and sales of $5.66 billion topped estimates; the print showed net income slipping year-on-year and management held — rather than lifted — full-year same-club guidance of +23%, disappointing a stock that had run hard into the report.
