Chipmakers Propel S&P 500 to New Heights Amid Market Optimism

The S&P 500 achieved a record close, driven by the semiconductor sector, while weaker job growth did not affect expected interest rate cuts. Broadcom, Tesla, and Alphabet contributed significantly to the market rally. The anticipation around AI's impact on industries and the upcoming fourth-quarter earnings season also played a role.

The S&P 500 soared to a new record high on Friday, buoyed by gains in chipmakers such as Broadcom, despite a downbeat jobs report. Wall Street's three major indices experienced significant growth, driven by sectors like materials and industrials that traditionally lag behind technology stocks.

The U.S. Labor Department reported slower-than-anticipated employment growth in December, but the unemployment rate's dip to 4.4% suggested a stable labor market. PHLX semiconductor index jumped 2.7%, further boosting market sentiment. Chip tool maker Lam Research saw an 8.7% rise, while Broadcom, Alphabet, and Tesla also contributed to the upward trend.

Investor focus on AI and forthcoming earnings heightened interest in stocks with potential revenue upsides. Analysts noted a shift towards undervalued stocks, with the S&P 500 value index outperforming the growth index in early 2026. Meanwhile, mortgage lenders rallied on Trump's mortgage bond purchase plans, and the Supreme Court's pending tariff ruling kept investors watchful.

(With inputs from agencies.)