US equities hit record highs as investors await jobs data and semiconductor earnings
The S&P 500 and Nasdaq close at new peaks, with attention now fixed on Friday's April nonfarm payrolls report and a series of earnings releases from key chipmakers including Lattice Semiconductor, Advanced Micro Devices, and Arm Holdings.
US equities have closed at fresh record highs, buoyed by strong performance in the technology sector and expanded artificial intelligence spending plans from major corporations. The Nasdaq Composite rose 0.9% to finish the week, while the S&P 500 gained 0.3%, both marking new all-time peaks. This positive momentum comes as investors look ahead to a busy schedule of economic data and corporate results.
The week's primary economic focus is the release of the April nonfarm payrolls report on Friday. Economists are forecasting a muted addition of approximately 60,000 jobs, a significant drop from the 178,000 positions added in March. Despite this lower forecast, some analysts suggest the labour market may be adapting to AI integration rather than suffering widespread job losses, with recent data from ADP and initial jobless claims indicating resilience.
Corporate earnings have played a pivotal role in supporting market levels, with the "Magnificent Seven" tech giants raising their AI spending projections from $670 billion to nearly $725 billion. This surge in investment has been mirrored by strong results from other sectors, including energy and consumer goods, suggesting that corporate profits are thriving despite ongoing geopolitical tensions in the Middle East and Iran.
Attention now shifts to the supply side of the AI boom as three major semiconductor companies report earnings over the coming days. Lattice Semiconductor Corporation will release its first quarter results on Monday, followed by Advanced Micro Devices on Tuesday and Arm Holdings on Wednesday. These reports are viewed as critical indicators of the health of the chip sector, which has seen the PHLX Semiconductor Index surge more than 40% in April.
The semiconductor sector has been a standout performer, with the PHLX index recording its best month since February 2000. While some strategists warn that such lofty performance could invite a potential pullback, others argue that continued positive surprises from key components will make it difficult to bet against the sector. AMD has already posted gains of 70% over the past month, while Lattice and Arm have risen 25% and 40% respectively.
Beyond the chipmakers, the earnings calendar features a diverse range of companies including Palantir, Novo Nordisk, and McDonald's. The breadth of results, combined with the upcoming jobs data, will provide further insight into whether the current bull market is sustainable amid evolving global risks and shifting economic indicators.
