The S&P 500 and Nasdaq Composite closed at record highs to begin May trading, buoyed by a strong performance in Apple shares. Conversely, oil prices experienced a decline as diplomatic efforts regarding the Middle East conflict continued.
Apple’s stock surged after exceeding earnings and revenue expectations, while oil prices reacted to developments in Iran-U.S. negotiations. The positive market sentiment is supported by a strong earnings season and hopes for de-escalation in the Middle East.
The S&P 500 index achieved a fresh all-time intraday high on Friday, marking a strong start to May's trading. This surge was significantly driven by a substantial rise in Apple shares, even as oil prices experienced a cooling trend. The broader market index concluded the session up 0.29%, settling at 7,230.12. The tech-focused Nasdaq Composite also reached a new record, adding 0.89% to close at 25,114.44. In contrast, the Dow Jones Industrial Average saw a slight dip, falling 152.87 points, or 0.31%, to end at 49,499.27.
Apple's stock climbed over 3% following the release of its fiscal second-quarter earnings and revenue, which surpassed analyst expectations. Despite a slight shortfall in iPhone revenue for the second time in three quarters, the company's optimistic revenue outlook for the current quarter overshadowed this concern.
Meanwhile, oil prices declined amid reports that Iran had conveyed its response to the latest U.S. amendments for a draft agreement to end the Middle East conflict, utilizing Pakistani mediators. President Donald Trump later expressed dissatisfaction with Iran's new peace offer. U.S. West Texas Intermediate crude futures fell 2.98% to $101.94 a barrel, and international benchmark Brent crude futures slid 2.02% to $108.17 a barrel.
These market movements followed a robust April, where both the S&P 500 and Nasdaq secured their strongest monthly performances since 2020, and the Dow posted its best month since November 2024. A strong first-quarter earnings season and easing Middle East tensions have been key drivers for the stock market's ascent this year, with major averages trading well above their 2026 starting points despite initial impacts from the U.S.-Iran conflict.
David Krakauer of Mercer Advisors expressed optimism for the continued long-term trajectory of equities. He believes that even if the conflict persists, domestic and international earnings growth potential will sustain momentum for stocks. Krakauer remains strategically bullish on equities, acknowledging the possibility of short-term pullbacks but emphasizing the intact productivity story driven by artificial intelligence.
In other market news, Blue Owl saw continued upward momentum, with Bank of America reiterating a buy rating despite a price target reduction. Avis experienced volatility despite a positive earnings beat, influenced by trading dynamics and significant share sales. Hershey received an upgrade to a buy rating from TD Cowen, citing confidence in future guidance and volume growth. Spirit Airlines' over-the-counter shares plummeted following reports of an imminent shutdown, while other airlines like JetBlue, United, and Delta saw gains. President Trump announced an increase in tariffs on European Union cars and trucks, impacting automakers like Stellantis. JPMorgan initiated coverage of Arrowhead Pharmaceuticals with an overweight rating, highlighting its RNAi portfolio growth. Federal Reserve officials who dissented on the post-meeting statement indicated disagreement with hinting at future rate cuts. The ISM manufacturing index remained positive in April, though the prices index hit a four-year high. Asian markets closed higher in holiday-thinned trading, while UK stocks opened lower, with Diageo gaining on tariff news and NatWest shares falling after earnings.
