U.S. stocks were mixed on Friday, with tech leading the way after a major legal overhang tied to Federal Reserve leadership was removed, and chip stocks surged on strong earnings. The Nasdaq Composite outperformed, climbing roughly 1.5%, while the S&P 500 added about 0.7%. The Dow Jones Industrial Average lagged, slipping around 0.3% as gains in technology failed to fully offset weakness in more defensive and industrial names.
The divergence highlights a market still being driven by AI enthusiasm and megacap momentum, even as macro uncertainty lingers. Investors reacted positively after the Department of Justice dropped its investigation into Fed Chair Jerome Powell, a move that could smooth the path for leadership clarity at the central bank. At the same time, a powerful rally in semiconductor stocks, sparked by blockbuster results from Intel, reignited the tech trade and pushed the broader market higher.
Market Movers:
- Intel (INTC) +25% – Shares skyrocketed after a blowout earnings report and strong forward guidance, signaling renewed strength in both its PC and data center businesses. The results reinforced the narrative that legacy chipmakers are benefiting from the AI infrastructure boom, driving one of the stock’s biggest single-day gains in decades.
- Nvidia (NVDA) +5% – The AI leader climbed as continued momentum in semiconductors pushed its market cap back above $5 trillion. Investors piled into the stock amid optimism that demand for AI chips and data center capacity remains far from peaking.
- MaxLinear (MXL) +66% – Shares surged after issuing well-above-consensus guidance tied to accelerating demand in AI-driven optical data center products. The company’s outlook pointed to a sharp inflection in revenue growth as hyperscalers ramp up next-generation infrastructure.
- Advanced Micro Devices (AMD) +13% – The stock rallied in sympathy with Intel’s results and on bullish analyst commentary pointing to a structural increase in AI-driven CPU demand. Investors are betting AMD will benefit from tightening supply and stronger pricing power across server markets.
- SAP (SAP) +7% – Shares gained after strong cloud revenue growth and a surge in backlog signaled continued enterprise demand. The results underscored the durability of software spending tied to digital transformation and AI integration.
- Coursera (COUR) -15% – The stock dropped sharply after reporting a wider-than-expected loss and declining free cash flow. Despite solid user growth, concerns about profitability and near-term guidance weighed heavily on investor sentiment.
- Charter Communications (CHTR) -15% – Shares fell after losing more broadband subscribers than expected and posting weak earnings. The results reinforced concerns about intensifying competition and slowing growth in core connectivity services.
- HCA Healthcare (HCA) -7% – The hospital operator declined after softer margins and weaker patient volumes offset a modest revenue beat. Investors reacted negatively to continued pressure on profitability and lack of upward guidance revisions.
Tech Rally Gains Traction
Friday’s gains were largely driven by a powerful resurgence in semiconductor stocks, with investors rotating back into AI beneficiaries. Intel’s results served as a catalyst, but the broader move reflects ongoing confidence in the data center buildout and long-term AI demand cycle. The rally also signals a shift in perception: investors are increasingly viewing the AI trade as broadening beyond a handful of dominant players. Legacy firms and second-tier chipmakers are now participating more meaningfully, suggesting the next phase of the cycle could be more expansive.
Policy Clarity Boosts Sentiment
Markets also got a boost from Washington after the Department of Justice dropped its investigation into Jerome Powell. The decision removes a layer of uncertainty around Federal Reserve leadership at a critical time for monetary policy. With Fed chair nominee Kevin Warsh still undergoing confirmation, the development is being interpreted as a step toward greater institutional stability. Investors are closely watching how leadership changes could influence the central bank’s approach to inflation, rates, and financial conditions.
Geopolitics And Oil Keep Markets On Edge
Despite the rally in equities, geopolitical tensions remain a key overhang. The extension of a ceasefire in the Middle East has provided temporary relief, but uncertainty around long-term peace prospects continues to cloud the outlook. Oil prices remain elevated, hovering near key levels as supply concerns tied to disruptions in the Strait of Hormuz persist. Higher energy costs are feeding into inflation expectations and could complicate the Federal Reserve’s policy path in the months ahead.
Looking Ahead
Investors are heading into the next stretch of earnings season with renewed optimism around tech but lingering caution on the macro backdrop. The durability of the AI trade, combined with improving clarity on Fed leadership, is helping support equities—but risks tied to geopolitics and inflation remain front and center. The next major test will come from upcoming megacap earnings and any developments in global tensions. If tech momentum holds and macro risks stabilize, markets could push higher, but volatility is likely to remain a defining feature in the near term.