The S&P 500 closed at a fresh record high on Thursday, driven by a surge in semiconductor stocks even as broader market sentiment wavered under rising oil prices and cooling software sector momentum.
Texas Instruments led the chip rally with an 18% gain, positioning the company for its best single-day performance since October 2000, when it rose 24.1%. The move pushed the iShares Semiconductor ETF (SOXX) to its 12th consecutive intraday high and put it on track for a 17th straight daily gain — a streak unmatched in recent market history.
Yet the strength in chips contrasted with broader sector divergence. Even as SOXX advanced, the Technology Select Sector SPDR ETF (XLK) faced the risk of snapping its 16-day winning streak, lagging behind all ten of its sector peers. This divergence underscored a market split: hardware and industrial-linked tech names outperformed, while pure-play software and consumer-facing technology stocks showed signs of fatigue.
The intraday record highs were widespread across non-tech sectors as well. Industrial names like Caterpillar, CSX, Eaton, and GE Vernova hit new highs, alongside financials such as Principal Financial and consumer discretionary names like Casey’s General Stores. Real estate exposure through Equinix likewise participated, signaling that the rally extended beyond semiconductors into capital-intensive and infrastructure-linked industries.
This market behavior unfolded against a backdrop of mixed economic signals. U.S. Manufacturing activity came in stronger than expected in April, with S&P Global’s manufacturing PMI at 54.0 — the highest since May 2022 — driven by robust production and new orders. The services PMI also exceeded forecasts at 51.3, though forward-looking indicators remained muted, suggesting businesses see near-term strength but remain cautious about the outlook.
Geopolitical tensions continued to cast a shadow, particularly for energy-exposed industries. American Airlines cut its full-year 2026 earnings outlook, now projecting an adjusted loss of 40 cents per share, down sharply from its January forecast of $1.70 to $2.70. The airline cited surging fuel costs tied to the U.S.-Iran conflict as the primary drag, though its stock rebounded more than 4% in midday trading after first-quarter losses and revenues beat estimates, according to LSEG data.
Art Hogan, chief market strategist at B. Riley Wealth, described the market’s behavior as a “balancing act,” noting that while investor focus had shifted from macro geopolitical fears to company-specific earnings over the past two weeks, the fragility of sentiment remained evident. “One well-placed social media post can shift that pretty quickly,” Hogan warned, adding that investors’ reluctance to sell off sharply reflected a “muscle memory” of past policy-driven announcements that sparked sudden reversals.
For more on this story, see Nasdaq Hits 10-Day Winning Streak as Tech Boom Fuels Market Rally.
The semiconductor strength, meanwhile, was not isolated to Texas Instruments. The Yahoo Finance list of intraday highs included Analog Devices, Cirrus Logic, KLA, Monolithic Power Systems, Marvell Technology, Teradyne, and others — a broad-based advance in chip design, manufacturing, and equipment firms that helped lift the SOXX ETF to sustained highs.
Still, the gains in chips and industrials were not enough to lift all boats. Software stocks, represented by the XLK ETF, showed relative weakness, raising questions about whether the market’s leadership was narrowing to those sectors most directly benefiting from infrastructure spending, defense-related demand, or resilient industrial activity — rather than broad-based innovation or consumer tech adoption.
How geopolitical risks are weighing on airlines while boosting defense-linked industrials
The U.S.-Iran conflict has directly impacted American Airlines through higher jet fuel costs, prompting a downgrade in full-year earnings expectations. Yet the same geopolitical environment has supported industrial stocks like Eaton, GE Vernova, and Quanta Services, which benefit from increased demand for power infrastructure and defense-related manufacturing — illustrating how the same macro tension creates winners and losers across sectors.
Why chip stocks are outperforming despite broader tech sector hesitation
Semiconductor gains are being driven by specific company-level strength — exemplified by Texas Instruments’ 18% surge — rather than broad tech optimism. Investors appear to be rewarding firms with exposure to industrial automation, automotive electronics, and communications infrastructure, even as software-facing tech shows signs of exhaustion after prolonged gains.
What the April PMI data reveals about the durability of the current market rally
The stronger-than-expected manufacturing and services PMI readings provide fundamental support for the market’s advance, particularly the manufacturing index at 54.0, which reflects real expansion in output and orders. However, the muted forward-looking components suggest that while current conditions are better than feared, businesses remain hesitant to commit to long-term expansion, adding a note of caution to the equity rally.
Why did Texas Instruments’ stock jump so sharply on Thursday?
Texas Instruments surged 18% on Thursday, putting it on track for its best one-day gain since October 2000, though the sources do not specify the exact catalyst beyond its inclusion in a broad semiconductor rally that lifted the SOXX ETF to record intraday highs.
Is the S&P 500’s record high being driven by broad market strength or narrow sector leadership?
The record high reflects a mix of broad and narrow leadership: while semiconductor and industrial stocks are advancing strongly, software stocks are lagging, and the gains are concentrated in specific sectors like chips, industrials, and financials rather than across the entire market.
