The S&P 500 is up about 16 percent since the end of March, climbing alongside the Nasdaq to set consecutive record highs.
A $700 billion artificial intelligence spending boom is fueling the gains. Tech stocks, particularly semiconductor makers like Nvidia and AMD, are driving the optimism. The corporate backdrop provides support, with 84% of S&P 500 companies beating profit expectations. An April jobs report showing 115,000 new roles proved the broader economy is absorbing inflation pressures brought on by the Iran conflict.
A top-heavy climb
- Only 52% of S&P 500 components closed above their 50-day moving averages while the index sat 7.7% above its own moving average.
- The top 10 performers in the Nasdaq 100 are up an average of 784% over the past year, exceeding the 622% gains seen in the year leading up to the March 2000 dot-com peak.
- The Philadelphia Semiconductor Index jumped 2.6% to an all-time high, continuing a parabolic run while most non-tech stocks move sideways or lower.
- The S&P 500 recorded just its third session since 1990 where more stocks hit new lows than new highs on a record-setting day.
Equities are climbing directly over persistent geopolitical constraints. President Donald Trump warned the fragile US-Iran ceasefire has a 1% chance of living after Tehran rejected terms to end the conflict. Investors conditioned to buy market weakness are ignoring the deadlock, pushed by retail flows into leveraged exchange-traded funds and call options.
That stalled peace deal leaves traffic through the Strait of Hormuz nearly halted. US crude rose to around $96, reigniting concerns about energy disruptions. Treasury yields are rising, and Federal Reserve rate cuts are being priced out for the year.
