US stock indices ended last week at record highs, helped by strong AI-driven earnings, encouraging economic data and a sharp drop in oil prices, according to Deutsche Bank.
The rally pushed both the S&P 500 and the Nasdaq to fresh peaks, even as Treasury yields finished little changed as investors weighed robust labour data against softer wage growth and easing inflation expectations.
The tone was firmly risk-on for much of the week.
Big technology names remained at the centre of the advance, with chipmakers once again leading gains, while lower oil prices offered additional support by easing concerns that energy costs could reignite inflation pressure.
Stocks hit fresh records
The S&P 500 rose 2.34% over the week, extending its winning streak to six consecutive weeks.
The Nasdaq outperformed with a 4.30% gain, reflecting continued strength in growth and technology shares as investors rewarded companies tied to artificial intelligence and digital infrastructure.
Semiconductor stocks were especially strong.
The Philadelphia Semiconductor Index jumped 10.57% for the week, underlining how central the chip trade remains to broader market sentiment.
That sector leadership helped drive the major benchmarks to all-time highs, even though the S&P lost some momentum late in Friday’s session.
The market’s ability to hold near record territory despite a modest late pullback suggested investors were still comfortable adding exposure to equities.
In particular, the combination of solid earnings and lower energy prices gave traders a reason to look past some of the mixed macro signals that emerged towards the end of the week.
Earnings and oil support gains
Deutsche Bank said the rally was driven by three clear factors: strong earnings linked to AI, improving US data and falling oil prices.
That combination matters because it supports both sides of the market narrative: stronger corporate profits and a less threatening inflation backdrop.
AI-related earnings remained an important driver of sentiment, especially in large-cap technology and semiconductor names.
Investors have been willing to pay up for companies seen as direct beneficiaries of spending on data centres, advanced chips and related infrastructure, and last week’s moves suggested that enthusiasm has not faded.
At the same time, a sharp drop in oil prices gave equities an extra lift.
Lower crude can ease pressure on inflation expectations and reduce concern that the Federal Reserve may need to keep policy restrictive for longer than markets would like.
Data send mixed signals
The economic picture was more mixed than the headline rally in stocks might suggest.
April non-farm payrolls came in above expectations at 115,000, pointing to continued resilience in the labour market, but average hourly earnings slowed to 3.6% from 3.8%, indicating wage pressure may be easing.
Other reports sent a less straightforward message.
The University of Michigan’s preliminary consumer sentiment reading for May came in at 48.2, below expectations of 49.5, suggesting households remain cautious.
Meanwhile, the New York Fed’s one-year inflation expectations gauge rose to 3.64% from 3.5%, hinting that inflation worries have not disappeared.
That mix helps explain why the bond market was relatively restrained.
Stronger payrolls on their own might have pushed yields sharply higher, but softer wage growth and mixed inflation signals offset some of that pressure.
Yields stay steady
Treasury yields were broadly unchanged by the end of the week, reflecting the market’s uncertainty over whether stronger growth or softer inflation will prove the more durable trend.
The 10-year Treasury yield edged down 0.9 basis points to 4.36%, while the two-year yield rose 1 basis point to 3.89%.
For now, equities appear to be drawing comfort from the idea that growth remains intact without an obvious reacceleration in inflation.
That has kept the focus on earnings momentum, especially in AI-linked sectors, while leaving rates markets in more of a wait-and-see mode.
The next test for Wall Street will be whether incoming inflation and activity data can justify record valuations without forcing yields materially higher.
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