NEW YORK: The S&P 500 and the Nasdaq edged higher on Friday, boosted by surging chip stocks after March inflation data met expectations despite ongoing pressures from the war in the Middle East, while investors monitored the uneasy truce between the US and Iran.
Tehran said a ceasefire in Lebanon was a prerequisite for peace talks to proceed, casting doubt over the first round of discussions with Washington, scheduled for Saturday.
Investors were cautiously optimistic a peace agreement could be reached, despite the two-week ceasefire showing cracks as each side accuses the other of violations.
“People are maybe positioning. They know that it’s not a done deal; they want to see it get done and then you’re going to see the market really rally,” said Eric Schiffer, chairman of The Patriarch Organization, a Los Angeles-based family office.
The two-week US-Iran truce, and comments from Israeli Prime Minister Benjamin Netanyahu that he was seeking direct talks with Beirut, largely buoyed market sentiment this week.
The S&P 500 and the Nasdaq were on track for their biggest weekly jumps since May, and the Dow was set for its sharpest rise since June.
At 11:45 a.m. ET, the Dow Jones Industrial Average fell 187.76 points, or 0.39 percent, to 47,998.04, the S&P 500 gained 3.60 points, or 0.05 percent, to 6,828.26 and the Nasdaq Composite rose 106.45 points, or 0.47 percent, to 22,928.87.
The S&P 500 information technology index was the biggest boost to the index, rising 1 percent, with chipmakers taking the lead. Nvidia and Broadcom rose 2.7 percent and 5.7 percent, respectively, and the Philadelphia SE Semiconductor index hit a record high of 8,926.95.
“One thing we know is, businesses will continue to be buying chips at mass rates, so any AI hardware remains the main trade today,” Schiffer said.
However, weakness in financial stocks, which were down 1.2 percent, capped gains on the benchmark index. Declines in Goldman Sachs and Travelers dragged on the Dow.
In economic data, US consumer prices increased the most in nearly four years in March as the war boosted oil prices and tariff effects persisted.
Traders stuck to bets that the US Federal Reserve would hold borrowing costs steady this year, according to data compiled by LSEG, pulling back from an expectation of two rate cuts this year before the conflict began.
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