AI stocks drive major indexes toward record highs

U.S. equity indexes advanced on Friday, with the S&P 500 and Nasdaq Composite approaching record territory as investor sentiment improved following strong earnings from leading artificial intelligence-related companies.

The S&P 500 was up 0.6% in early trading, while the Nasdaq Composite gained 0.8%, both tracking levels last seen at their respective peaks. The Dow Jones Industrial Average rose 0.4%, supported by gains in industrial and technology shares. Trading volumes were moderate, with 8.2 billion shares changing hands on major U.S. exchanges, below the 2024 average of 9.1 billion.

Market focus remained on earnings from chipmakers and software firms, which have been primary beneficiaries of the AI investment cycle. Nvidia Corp. was among the top contributors to gains, following reports of robust demand for its AI accelerators. The company’s stock rose 2.3% in pre-market trading after closing at a record $957.13 on Thursday.

Analysts at Goldman Sachs noted that AI-related earnings momentum could extend into the second half of the year, citing a 15% increase in enterprise AI spending forecasts. "The current rally is being driven by a narrow group of mega-cap tech stocks, but the broadening participation in AI-driven growth is encouraging," said a strategist at the bank.

The Russell 2000 index of small-cap stocks lagged, down 0.2%, reflecting ongoing concerns about economic growth and credit conditions in the sector. Treasury yields were little changed, with the 10-year note at 4.25%, as investors balanced AI optimism with cautious macroeconomic outlooks.

The dollar index edged 0.1% higher against a basket of major currencies, while gold futures were flat at $2,350 per ounce. Oil prices were mixed, with Brent crude up 0.3% at $85.40 per barrel and WTI crude down 0.2% at $81.10.

Investors will monitor next week’s economic data, including the ISM Manufacturing PMI and nonfarm payrolls, for further signals on the Federal Reserve’s policy trajectory.