Stock Market Hits Record as S&P 500 Closes Above 7,500 on Strong Tech, Earnings, and Trump-Xi Summit
The S&P 500 and Nasdaq reached all-time highs on Thursday as investors gained confidence from strong corporate earnings, AI sector momentum, and positive signals from the Trump-Xi meeting. The market surge contrasts sharply with persistent headwinds including inflation above 3%, soaring energy costs from the Iran conflict, and record-low consumer sentiment.
Markets Surge Despite Economic Headwinds
The Dow Jones Industrial Average retook 50,000 after strong earnings, rising 370.26 points or 0.75% to 50,063.46, while the S&P 500 climbed 0.77% to close at 7,501.24, and the Nasdaq Composite gained 0.88% to 26,635.22, with both scoring fresh all-time intraday highs and record closes.
Cisco Leads Earnings Momentum
Shares of Cisco surged 13% after the software giant posted third-quarter results and guidance that beat Wall Street's expectations and announced it would be cutting almost 4,000 jobs. Applied Materials, the semiconductor equipment supplier, climbed about 2% in extended trading after reporting fiscal second quarter results that beat expectations, posting quarterly earnings of $2.86 per share on revenues of $7.91 billion, versus analyst expectations of $2.66 per share on $7.65 billion in revenue.
Inflation and Fed Policy Concerns
The Michigan Consumer Sentiment Index fell to 48.2 in May, the lowest reading in history, while CPI inflation accelerated to 3.8% in April because of oil supply disruptions tied to the Iran conflict, the highest reading in three years. Wholesale prices soared 6% in April, pushed up largely by higher energy prices.
Fed Chair Transition Amid Inflation Pressures
The US Senate confirmed Kevin Warsh as the new chairman of the Federal Reserve with a 54-45 vote, and he takes over at a time when inflation has remained above the Fed's 2% target for over five years and is being further pressured by tariffs and a surge in oil prices from the conflict in the Middle East.