Dow hits 50,000 for first time
The Dow Jones Industrial Average topped 50,000 points for the first time on Friday as investors rallied in response to a rout in tech stocks earlier in the week.
The closely watched index rose above 50,000 for the first time after 2 p.m. during Friday's trading session after rising more than 1,000 points on the day, which represents a gain of more than 2.2%.
Chip stocks surged on expectations they would benefit from increased spending on artificial intelligence (AI) data centers by Amazon and Google parent company Alphabet.
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Shares in Nvidia, Advanced Micro Devices and Broadcom all rose by more than 7%. Amazon's stock fell nearly 7% after announcing it planned to ramp up capital expenditures by more than 50% this year amid the AI race following a similar announcement by Alphabet on Wednesday.
Friday's rallies in the S&P 500 and the Nasdaq followed three consecutive days of losses amid worries about AI.
Several software companies saw stock declines amid investors' concerns that competition in the AI space could hurt their margins as well as questions about whether valuations have become excessive amid the AI boom.
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"This trade has been volatile, and there have been selloffs at times, but I think there's enough evidence that there's real demand for AI products, real promise with what they can do, and a necessity of a lot of spending to get there," said Ross Mayfield, investment strategy analyst at Baird.
"So when there's this kind of a sell-off, I think there's a floor where there's going to be a certain set of investors that steps in and starts buying these names," he added.
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The S&P 500 index, which is viewed as more broadly representative of the U.S. market, was up 1.76% at 6,917 points.
Nine of the 11 S&P 500 sector indexes rose, led by the information technology index's gain of more than 3.7% and a nearly 2.7% gain by the index for industrials.
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The S&P was about 1% below its record-high close that was set last week, while the tech-heavy Nasdaq was down about 4% from its record high close last October.
Reuters contributed to this report.