US STOCKS-S&P 500 hits record high as chipmakers lead broad gains

By Purvi Agarwal and Noel Randewich

Jan 9 (Reuters) - The S&P 500 climbed to a record high on Friday, lifted by a rally in 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 were on track for gains 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 .SOX jumping 2.6% to just short of a record high.

Lam Research LRCX.O rallied 8% to $217 after Mizuho raised its price target on the chip manufacturing tool maker to $220 from $200. Broadcom AVGO.O rose 3.7%, lifting the S&P 500 and Nasdaq.

Vistra VST.N jumped about 10% after Meta Platforms META.O 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 INTC.O rallied 10.3% after Trump said he had a "great meeting " with the chipmaker's chief executive officer, Lip-Bu Tan.

Ten of the 11 S&P 500 sector indexes rose, led by materials .SPLRCM, up 1.69%, followed by a 1.54% gain in utilities .SPLRCU.

The S&P 500 was up 0.72% at 6,971.19 points. The Nasdaq gained 0.91% to 23,693.13 points, while the Dow Jones Industrial Average was up 0.48% at 49,500.42 points.

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 .IVX has climbed about 3% so far in 2026, beating a 1% gain in the S&P 500 growth index .IGX.

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 LDI.N surged 25%, Rocket Companies RKT.N gained 6.9% and Opendoor Technologies OPEN.O rallied 17%.

The Philadelphia Housing index .HGX gained 5.1% to its highest since October.

General Motors shares GM.N fell 3% 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 .AD.SPX by a 1.8-to-one ratio.

The S&P 500 posted 45 new highs and 6 new lows; the Nasdaq recorded 132 new highs and 49 new lows.