Chipmakers lead a rebound
Shares in chip companies rose on Friday as AI infrastructure stocks recovered. Futures for the Nasdaq 100 gained about 1 percent and S&P 500 futures added 0.5 percent, both moving back toward the record highs set earlier in the week.
The move came even after a report said OpenAI revenue could fall short of earlier estimates. Investors treated the news as a company issue rather than a sign of weaker demand for computing hardware. Broadcom, Micron, Marvell, AMD and Lam Research each climbed.
Records built on profit expectations
The S&P 500 closed at 7,818.93 on October 6, its first close above 7,800, and the index is up more than 14 percent this year. The Nasdaq Composite finished near 27,600.
Earnings season is now the main test. Analysts expect S&P 500 companies to report profit growth of about 30 percent for the July-to-September quarter, according to LSEG. Technology earnings are forecast to rise about 66 percent, and energy earnings about 115 percent on the back of oil prices above 100 dollars a barrel.
Not every number has been strong. Delta Air Lines reported quarterly earnings of 1.72 dollars a share, below expectations, a reminder that consumers are under pressure. US mortgage rates have climbed to their highest level since 2023, and a survey of consumer sentiment fell to a five-month low.
Memory and packaging stay tight
The supply chain behind the AI buildout remains stretched. High-bandwidth memory, advanced packaging and leading-edge wafer capacity are all sold out well ahead, and equipment makers say lead times for new tools stretch into next year. That tightness supports prices, and it explains why chip suppliers keep outperforming the wider market.
Traders still expect the Federal Reserve to hold rates steady at its October meeting, with a possible increase in December. Higher borrowing costs are the main risk to the rally, along with any sign that AI spending plans are being trimmed.
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