Tech-led rally sends S&P 500 to records before Friday pullback

Tech-led rally pushed the S&P 500 back to records before Friday’s fade

U.S. stocks spent much of the last few sessions digesting a powerful technology-led advance, with the S&P 500 hitting a record-high close on Thursday before easing off those highs on Friday as investors weighed softer retail sales data and renewed geopolitical concerns. The latest move came after upbeat AI-related earnings and benign inflation readings helped keep rate-hike fears in check.

What drove the move

Reuters reported that the S&P 500 reached a record-high close on Thursday, supported by advances in Sandisk and other heavyweight technology stocks, after tame producer price inflation data reinforced expectations that the Federal Reserve would not raise rates at its September meeting. The index ended Thursday at 7,798.99. Reuters

Earlier in the week, Reuters said the S&P 500 and Nasdaq rose on Wednesday after upbeat quarterly results from CoreWeave and other AI infrastructure firms, while mild inflation data supported the view that the Fed would hold rates steady in September. The S&P 500 closed Wednesday at 7,748.50. Reuters

On Friday, the market gave back some gains. Reuters reported that the S&P 500 closed lower, weighed down by Applied Materials and weaker-than-expected retail sales data, though the index still gained 0.4% for the week and logged a third consecutive weekly advance. Reuters

Why investors were focused on tech

The week’s broader tone remained constructive because strong corporate results continued to offset macro uncertainty. Reuters noted that about 85% of S&P 500 companies that had reported had beaten earnings estimates, and overall profits were up 32.7% excluding mark-to-market gains at Alphabet and Amazon. Reuters

That backdrop helped keep attention on AI-linked names. Reuters also said stronger revenue guidance from Anthropic lifted technology stocks in Monday’s futures trade, showing that the AI trade remained a key market driver even after the week’s record-setting moves. Reuters

Market context

The week’s trading pattern showed a market still near highs but sensitive to every new inflation print, earnings release and geopolitical headline. Reuters said U.S. equities reached record levels as rate-hike fears eased, while later sessions showed that the rally could still stall when retail data softened or oil and Middle East tensions re-entered the picture. Reuters Reuters

What to watch

Investors will be watching whether the AI and semiconductor earnings backdrop can keep broad indexes near records, and whether incoming inflation or retail data changes expectations for Federal Reserve policy. The next catalyst will likely come from another round of megacap tech results and any sign that the market’s recent earnings-driven leadership is broadening beyond the AI trade.