S&P 500 notches record high close driven by Broadcom, other chipmakers

By Noel Randewich

Jan 9 (Reuters) – The S&P 500 rallied to a record high close on Friday, lifted by Broadcom and other chipmakers, while a weaker-than-expected jobs report did little to alter expectations of interest rate cuts from the Federal Reserve this year.

Wall Street’s three main indexes all gained sharply in 2026’s first full week of trading, fueled by increases in materials, industrials and other sectors that have lagged technology stocks in recent years.

A Labor Department report showed U.S. employment growth slowed more than expected in December, but a decline in the unemployment rate to 4.4% suggested the labor market was not rapidly deteriorating.

Chip stocks rallied, with the PHLX semiconductor index jumping 2.7% to a record high. 

Lam Research rallied 8.7% to $218.36 after Mizuho raised its price target on the chip manufacturing tool maker to $220 from $200.

Broadcom rose 3.8%, Alphabet added 1% and Tesla climbed 2.1%, all lifting the S&P 500 and Nasdaq.

Vistra jumped 10.5% after Meta Platforms agreed to buy power from the company’s nuclear plants.

“On the overall AI theme, investors are getting granular and picking the winners and losers in terms of sub-themes and individual names,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

“We view that as a more positive development. It means that we’re getting closer to the monetization phase, where people can actually see and touch the revenue enhancements that are going to come from this revolutionary technology.”

Intel rallied almost 11% after Trump said he had a “great meeting” with the chipmaker’s chief executive officer, Lip-Bu Tan.

The S&P 500 climbed 0.65% to end the session at 6,966.28 points.

The Nasdaq gained 0.82% to 23,671.35 points, while the Dow Jones Industrial Average rose 0.48% to 49,504.07 points.

Nine of the 11 S&P 500 sector indexes rose, led by materials, up 1.8%, followed by a 1.24% gain in utilities.

For the week, the S&P 500 climbed 1.6%, the Nasdaq rose 1.9% and the Dow added 2.3%.

Valuations on Wall Street were relatively high ahead of fourth-quarter earnings season. The S&P 500 is trading at about 22 times expected earnings, down from 23 in November, but above its five-year average of 19, according to LSEG data.

Underscoring a recent shift toward stocks that have underperformed in recent years, the S&P 500 value index has climbed about 2% so far in 2026, beating a 1% gain in the S&P 500 growth index.

The U.S. Supreme Court said it would not issue a ruling on Friday on the legality of U.S. President Donald Trump’s sweeping tariffs. This left investors, many of whom expected a decision, awaiting clarity. 

Traders anticipate heightened volatility across financial markets if the court strikes down the tariffs.

Mortgage lenders rose a day after Trump said he is ordering his representatives to buy $200 billion in mortgage bonds to bring down housing costs.

LoanDepot surged 19.3%, Rocket Companies gained 9.6% and Opendoor Technologies rallied 13.1%.

The Philadelphia Housing index gained 5.7% to its highest since October. 

General Motors shares fell more than 2% after the automaker said on Thursday it would take a $6 billion charge to unwind some electric-vehicle investments.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.3-to-one ratio.

The S&P 500 posted 48 new highs and 6 new lows; the Nasdaq recorded 140 new highs and 62 new lows.

Volume on U.S. exchanges was relatively heavy, with 17.0 billion shares traded, compared to an average of 16.4 billion shares over the previous 20 sessions.

(Reporting by Purvi Agarwal in Bengaluru and by Noel Randewich in San Francisco; Editing by Shinjini Ganguli and David Gregorio)