May 8 (Reuters) - The S&P 500 and the Nasdaq touched fresh peaks on Friday, boosted by gains in Nvidia and other technology stocks, while a stronger-than-expected jobs report allayed concerns over the state of the labor market.
Tech heavyweights Nvidia (NVDA.O), and Apple (AAPL.O), rose 2.3% and 1.8%, respectively, while the Philadelphia SE Semiconductor index (.SOX), recovered from Thursday's losses to reach a new high on expectations of strong AI infrastructure demand.
Data showed U.S. employment increased more than expected in April and the unemployment rate held steady at 4.3% - pointing to labor market resilience and reinforcing expectations that the Federal Reserve would leave interest rates unchanged for some time.
"It was encouraging that hiring broadened across sectors, a sign of improving labor market breadth," said Angelo Kourkafas, senior strategist at Edward Jones.
"The Fed will remain firmly on hold as the focus now is going to be on the energy-driven inflation pressures in the months ahead."
Traders continued to bet that the central bank will hold interest rates steady in the 3.50% to 3.75% range until the end of the year.
At 11:44 a.m. the Dow Jones Industrial Average (.DJI), rose 24.36 points, or 0.05%, to 49,621.33, the S&P 500 (.SPX), gained 53.99 points, or 0.74%, to 7,391.10, and the Nasdaq Composite (.IXIC), was up 340.22 points, or 1.32%, to 26,144.57.
The S&P 500 and the Nasdaq were on track for a sixth straight week of gains, in what could be the longest such winning streak since October 2024. The Dow was set for a second consecutive week of advances.
The overall optimism helped investors look past fresh attacks between U.S. and Iranian forces in the Gulf.
Brent crude rose above $100 a barrel as hopes faded for a quick resolution to the Middle East conflict and the gradual reopening of the Strait of Hormuz, a key transit route for oil and liquefied natural gas.
The U.S. said it expected a response from Tehran to its latest proposal later on Friday.
STRONG EARNINGS
Despite concerns that oil prices were fueling inflation, the S&P 500 and the Nasdaq have hit record highs, helped by a strong earnings season, signs of a resilient economy and optimism around artificial intelligence.
"There's a huge secular movement at play within the tech sector, and specifically microchips," said Charlie Ripley, senior investment strategist for Allianz Investment Management.
"While there is some concentration, it's reflective of what's happening in the real economy with the AI buildout and the expansion."
Of the 440 S&P 500 companies that have reported first-quarter results so far, 83% have topped analysts' earnings estimates, according to data compiled by LSEG. That compares with a long-term average of about 67%.
However, there were some earnings disappointments on the day.
Cloudflare (NET.N), shares plunged 24.4% after the cloud services company said it would cut about 20% of its workforce and forecast second-quarter revenue slightly below Wall Street expectations.
Trade Desk (TTD.O), fell 6.2% after the ad-tech firm forecast second-quarter revenue below Wall Street estimates.
CoreWeave (CRWV.O), dropped 13% after the cloud infrastructure technology company raised the lower end of its annual capital expenditure forecast, citing a rise in component costs.
Online travel platform Expedia (EXPE.O), slipped 6.8% after it flagged the conflict in the Middle East was weighing on demand.
Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and 19 new lows, while the Nasdaq Composite recorded 100 new highs and 90 new lows.
Reporting by Sruthi Shankar and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai
