Wall Street climbs as investors buy AI stocks; Microsoft rallies

Wall Street climbed on Friday, lifted by Microsoft and other AI-related technology stocks, while high oil prices and a recent surge in U.S. Treasury yields kept investors on edge.

Gains in the S&P 500 and Nasdaq capped a volatile week driven by uncertainty about what industries will win and lose from artificial intelligence, and by concerns about the U.S. war with Iran and a surge in U.S. Treasury yields.

Microsoft rallied 3.3 percent, lifting its 2026 gain to 7 percent, after the software giant unveiled several new capabilities in its Copilot app, including a coding tool and an always-on AI agent.

Akamai Technologies surged 6 percent after an $11.6 billion cloud services deal with AI leader Anthropic. The deal includes a warrant that could give Anthropic up to 5 percent of Akamai.

"That's a positive from the standpoint that people are still investing, deals are still being done," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. "It's another circular deal, so OK ... but Akamai stock is up."

Chip maker Qualcomm gained 5.4 percent and Dell advanced 6.6 percent.

Meta Platforms dipped 3.6 percent. The social media company's stock has soared about 13 percent this week amid a strong reception to its Muse AI agent, which analysts say could benefit tech infrastructure stocks, while challenging banks, online shopping platforms and other consumer businesses.

The S&P 500 was up 0.45 percent at 7,738.67 points.

The Nasdaq gained 0.50 percent to 27,073.90 points, while the Dow Jones Industrial Average was up 0.78 percent at 51,747.99 points.

Seven of the 11 S&P 500 sector indexes rose, led by information technology, up 1.06 percent, followed by a 0.85 percent gain in industrials.

The S&P 500 was on track to gain over 1 percent for the week, while the Nasdaq was heading for a weekly gain of about 2 percent after it notched a record-high close on Tuesday.

The S&P 500 this week has traded just under 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights are responsible for much of the recent increase in earnings expectations.

A report that U.S. and Iranian negotiators continued to explore a phased path out of the war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade, helped market sentiment.

Data also showed strong AI-related capital expenditures boosted demand for key manufactured capital goods, outpacing expectations in August.

Brent crude eased but remained above $100 a barrel. The yield on the benchmark U.S. 10-year Treasury note hit a fresh 19-year high and was last up 3.4 basis points at 5.196 percent.

Traders see a 66 percent chance of the Federal Reserve increasing interest rates by at least 25 basis points in October, up from around 50 percent earlier this week, the CME Group's FedWatch Tool showed.

U.S. President Donald Trump said he had a "very productive meeting" with President Xi Jinping, following a three-day summit that showcased personal diplomacy rather than big breakthroughs in economic relations.

Magazine publisher People Inc jumped 11 percent after a report said MGM Resorts International was discussing a bid for the company.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.7-to-one ratio.

The S&P 500 posted three new highs and 31 new lows; the Nasdaq recorded 44 new highs and 147 new lows.