S&P 500 Nears Record High as SK Hynix Debut Lifts Sentiment

Wall Street's major indexes closed higher on Friday, with the S&P 500 ending the session just short of a record high. Investor optimism was fueled by a strong Nasdaq debut for South Korean chipmaker SK Hynix and growing anticipation for the second-quarter earnings season, which kicks off next week.

The S&P 500 climbed 0.42% to close at 7,575.39 points, while the Dow Jones Industrial Average rose 0.29% to 52,637.01. The tech-heavy Nasdaq Composite gained 0.29% to finish at 26,281.61. For the week, the S&P 500 and Nasdaq added 1.2% and 1.7% respectively, while the Dow posted a slight 0.5% loss.

Chip Sector in Focus

The market's positive tone was significantly influenced by the successful U.S. listing of SK Hynix. The memory-chip manufacturer's American Depositary Receipts (ADRs) ended their first day of trading at $170, a 13% premium to their offering price of $149. The high-profile debut, which raised over $26 billion, reinvigorated the artificial intelligence trade and boosted sentiment across the semiconductor sector.

Chipmakers have been central to this year's market rally, driven by expectations of massive AI-related spending. The PHLX chip index edged up 0.06% on Friday, marking its third consecutive day of gains. Among other major movers, Meta Platforms surged nearly 6%, while Moderna shares tumbled almost 11%.

Eyes on Earnings Season

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Investors are now turning their attention to the second-quarter corporate earnings season, which begins next week with reports from major U.S. banks. According to LSEG I/B/E/S data, analysts project a robust 24% year-over-year increase in S&P 500 earnings, with technology firms expected to be primary drivers of that growth.

"This is a high-bar quarter with a narrow margin of error," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, in comments to Reuters. He noted that bank results will offer a crucial reading on the underlying strength of the economy. Despite trading near record highs, the S&P 500's valuation has moderated slightly to about 20 times expected earnings from 21 in late May, thanks to rising profit estimates.

Looking Ahead

Beyond corporate results, market participants will be closely watching next week's June inflation data for fresh insights into the Federal Reserve's potential monetary policy path. Fed Chair Kevin Warsh is also scheduled to testify before a House committee. Trading volume was relatively light on Friday, with 14.5 billion shares exchanged, below the 20-session average of 22.4 billion, Reuters reported.