NEW YORK — Technology stocks powered solid gains for Wall Street on Friday after another chipmaker reported strong demand related to artificial intelligence.
The upbeat finish to the week for major indexes comes amid lingering anxiety over persistently high inflation, the risk of a U.S. debt default and broadly weak corporate earnings.
The S&P 500 rose, 54.17 points, or 1.3% to close at 4,205.45. It notched a small gain for the week and is in the green as May nears its close.
The Dow Jones Industrial Average rose 328.69 points, or 1%, to 33,093.34.
The tech-heavy Nasdaq notched the biggest gains, rising 277.59 points, or 2.2%, to 12,975.69. The index rose 2.5% for the week as artificial intelligence became a big focus for investors.
Marvell Technology surged a record-setting 32.4% after the chipmaker said it expects AI revenue in fiscal 2024 to at least double from the prior year. That follows Thursday’s report from fellow chipmaker Nvidia, which gave a big forecast for upcoming sales related to AI.
The revolutionary AI field has become a hot issue. Critics warn that it is a potential bubble, but supporters supporters say it could be the latest revolution to reshape the global economy. The nation’s financial watchdog, the Consumer Finance Protection Bureau, said it’s working to ensure that companies follow the law when they’re using AI.
Wall Street remains focused on Washington and ongoing negotiations for a deal to lift the U.S. government’s debt ceiling and avert a potentially calamitous default.
Wall Street and the broader economy already had a full roster of concerns before the threat of the U.S. defaulting on its debt became sharply highlighted on the list.
“Should we avoid that, and it appears that is a high probability, we come back to a trajectory of a slowing economy, still-too-high inflation and restrictive monetary policy,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.
A key measure of inflation that is closely watched by the Federal Reserve ticked higher than economists expected in April. The persistent pressure from inflation complicates the Fed’s fight against high prices.
Bond yields had been slipping just prior to the latest inflation data, but rose following the report. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, rose to 3.80% from 3.78% just before the report was released.
Markets are heading into a long weekend and will be closed in the U.S. for the Memorial Day holiday on Monday. Investors have another busy week of economic updates ahead, including more data on consumer confidence and employment.