US Stocks Today: S&P 500, Nasdaq End Higher, Notch Weekly Gains After Earnings-Heavy Week
The S&P 500 and Nasdaq Composite both closed at record highs on Friday. This capped a strong week for Wall Street. Investors cheered a wave of better-than-expected corporate earnings. Falling crude oil prices also helped boost market sentiment. The two major indexes have now posted their longest weekly winning streak since October 2024.
Record Highs and a Winning Streak
The S&P 500 rose 0.7% on Friday to finish at a new all-time high. The Nasdaq added 0.9%, also setting a fresh record close. The Dow Jones Industrial Average gained about 150 points. For the week, the S&P 500 gained 1.2%. The Nasdaq rose 1.4%. This marks the fifth straight weekly gain for both indexes. The last time they achieved such a streak was in October 2024.
Investors have been buying stocks on strong corporate results. Many companies have reported profits that beat Wall Street estimates. This has helped offset worries about high inflation and interest rates. Lower oil prices have also eased concerns about rising costs for businesses and consumers.
Strong Earnings Drive Optimism
First-quarter earnings season has been a major driver of the rally. According to data from FactSet, earnings growth for S&P 500 companies reached 27.8% in the first quarter. That is a sharp jump from the previous quarter. Even more impressive, 83% of companies have reported earnings above analyst expectations. This is well above the five-year average of 77%.
Technology and consumer discretionary stocks led the gains. Companies like Apple, Microsoft, and Amazon all reported strong results. Their earnings showed that consumer demand remains resilient despite higher prices. For example, Apple’s services revenue hit a record high. Amazon’s cloud computing business also grew faster than expected. These results gave investors confidence that corporate profits can keep rising.
Falling Oil Prices Provide a Tailwind
Crude oil prices fell for the third straight week. West Texas Intermediate crude dropped below $78 per barrel on Friday. That is down from over $85 per barrel in early April. Lower oil prices reduce costs for transportation, manufacturing, and shipping. This helps improve profit margins for many companies. It also gives consumers more spending power at the pump.
Energy stocks were the biggest losers this week. The sector fell 2.5% as oil prices declined. But the broader market benefited from the lower energy costs. Airlines, retailers, and food companies all saw their shares rise. Investors expect these companies to report better profits if oil stays low.
Historical May Weakness vs. Current Momentum
May is historically a weak month for stocks. The old saying “Sell in May and go away” reflects this seasonal pattern. Over the past 20 years, the S&P 500 has averaged a gain of just 0.1% in May. But many analysts believe this year could be different. The strong earnings season and falling oil prices are providing powerful support.
Market strategists at several major banks have raised their year-end targets for the S&P 500. They point to the earnings beat rate and the resilient economy. Consumer spending remains solid. The labor market is still tight with low unemployment. These factors suggest the economy can avoid a recession in the near term.
What Investors Should Watch Next
Looking ahead, investors will focus on inflation data due next week. The Consumer Price Index report for April will be released on Wednesday. Economists expect inflation to have eased slightly from March. If the data comes in lower than expected, it could fuel further gains. Lower inflation would increase the chances of the Federal Reserve cutting interest rates later this year.
Fed officials have said they need to see more progress on inflation before cutting rates. But the strong earnings season has reduced the urgency for rate cuts. Companies are making money even with high borrowing costs. This gives the Fed room to keep rates steady for longer without hurting the economy.
Overall, the outlook for US stocks remains positive. The record highs and winning streak show that investor confidence is high. Earnings growth is strong. Oil prices are falling. These factors could keep the rally going even as May’s historical weakness looms. But investors should stay cautious. Any surprise in inflation data or geopolitical tensions could quickly change the mood on Wall Street.
