S&P 500 gains 0.5% to record close led by tech and healthcare

The S&P 500 rose 0.5% to a record close, while the Nasdaq 100 gained 0.8% to its own all-time high, as technology and healthcare stocks powered broad-based gains.

"Strong earnings growth and AI-driven demand continue to support valuations despite geopolitical uncertainty," said Ben Snider, equity strategist at Goldman Sachs. The bank raised its S&P 500 year-end target to 8,000 from 7,600, citing an exceptional first-quarter earnings season.

Seven of the 11 S&P 500 sectors finished higher, with healthcare leading at 1.5% and technology adding 1.2%. Utilities lagged, falling 1.2%. Within the Nasdaq 100, Axon Enterprise surged 12.5%, Arm Holdings jumped 11% and Palantir Technologies gained 7.7%. On the downside, Synopsys tumbled 9%, Lumentum fell 4.2% and PDD Holdings dropped 4.1%.

The records come as first-quarter earnings growth is tracking at 29% year over year, according to LSEG data, up from the 16.1% estimate a month ago. Investors now turn to a busy week of retail earnings and the Conference Board's consumer confidence reading, which is expected to show the impact of elevated oil prices on household sentiment.

The rally extended beyond mega-cap tech, with the Philadelphia Semiconductor Index rising 4.6% to an all-time high. Micron Technology crossed the $1 trillion market capitalization threshold for the first time, surging 17% after UBS raised its price target to $1,625 from $535. Qualcomm added 5.3% following a Bloomberg News report that it reached a chip supply deal with TikTok owner ByteDance.

Treasury yields edged lower, with the 10-year note falling below 4.50% from Friday's close above 4.56%, providing additional support for equity valuations. The U.S. dollar index slipped 0.1% to 99.16. Brent crude oil traded above $100 a barrel after the U.S. struck two Iranian ships in the Strait of Hormuz, though West Texas Intermediate fell 2.2% to $94.45 as peace talks continued.

The Cboe Volatility Index declined 0.5% to 16.92, remaining below its trailing one-year average. Advancing stocks outnumbered decliners by a 2.55-to-1 ratio on the New York Stock Exchange and by a 1.99-to-1 ratio on the Nasdaq. The S&P 500 recorded 39 new 52-week highs and one new low, while the Nasdaq Composite posted 157 new highs and 52 new lows.

Goldman Sachs said it expects the S&P 500's price-to-earnings multiple to remain near the current 21 times, with valuation tailwinds from lower Treasury yields offset by headwinds from decelerating economic growth and uncertainty around AI disruption. The bank warned that higher energy prices from the Iran conflict could weaken consumer spending and reduce the likelihood of Federal Reserve rate cuts.

This article is for informational purposes only and does not constitute investment advice.