US stocks closed higher on Friday, with the S&P 500 finishing just below a record high. Optimism around memory chip makers rose after South Korea’s SK Hynix made a strong Nasdaq debut, while investors prepared for the quarterly earnings season starting next week.
The AI sector drew renewed attention as SK Hynix shares opened 14 percent above the $170 offering price. The company raised more than $26 billion through American Depositary Receipts priced at $149. Stocks extended gains after President Donald Trump said Iran had requested further talks, which the US accepted, though the June ceasefire was over.
Tensions between the US and Iran this week raised concerns that higher energy prices could increase inflation and push the Federal Reserve to raise interest rates.
Second-quarter earnings season begins next week with reports from major US banks. Analysts expect S&P 500 earnings to rise 24 percent from a year earlier, led by technology companies, according to LSEG I/B/E/S.
Equity strategist Terry Sandven noted the high expectations and limited room for disappointment. Bank results will indicate underlying economic strength and activity among consumers and businesses.
Thanks to higher profit estimates, the S&P 500 trades at about 20 times expected earnings, down from 21 in late May, even near record levels.
Chipmakers have gained from this year’s AI rally on expectations of heavy spending by large tech firms. Valuation concerns and profit-taking have added volatility to the sector.
Preliminary data showed the S&P 500 rising 28.72 points, or 0.38 percent, to 7,572.36. The Nasdaq gained 77.52 points, or 0.25 percent, to 26,273.21. The Dow Jones Industrial Average added 148.28 points, or 0.28 percent, to 52,635.69.
Meta Platforms reached its highest level since April, while Moderna posted its largest drop in over a year.
Next week’s June inflation data will provide more clues on the Fed’s policy path. Fed Chair Kevin Warsh is scheduled to testify before the House Committee on Financial Services.
Delta Air Lines shares fell despite forecasting third-quarter profit above expectations.
