The bull market is in full force. – Marketwatch/Istockphoto Photo Picture
After months of concern about tariffs, inflation, Middle East tensions and so much more, the S&P 500 and NASDAQ compound has yet graded another concern – coming back strongly and returning to record territory for the first time in months.
Investors are now wondering whether the new records signify a longer rally in the US stock market, or is it just a short period of prosperity before the next big shaking. For some strategists, the answer is one of the most long -standing questions of the market: How wide is the rally?
Technology stocks have been at the forefront of the market recording rally. What is called seven magnificent groups of Megacap-Technology names-which includes Apple Inc. AAPL, Microsoft Corp. MSFT, Nvidia Corp. NVDA, Amazon.com Inc. Amzn, Google Alphabet Inc. parent. Googl Goog, Meta Platforms Locations Inc. Co-capital, Tsla adds to the markets, Tsla bringing their total market value to nearly $ 18 trillion from Friday afternoon, according to Dow Jones market data.
Also leading the earnings on the S&P 500 SPX were shares of Coinbase Global Inc. Coin, which has increased over 140% since April 8Making it the best performer among 500 components of the large cap index. Following behind are shares of Seagate Technology Holdings STX and Microchip Technology Inc. MCHP, which also logged out a notable earnings of over 100% in the same period, according to Dow Jones Market data (see table below).
Source: Dow Jones Market Data –
Beyond individual names, technology -related sectors have also stood out as the best performers on the S&P 500 since April 8. The S&P 500 Information Technology sector is an Information Technology sector XX: SP500.45 has popped up over 41% since early April, while the XX XX: SP500 communications service index.
The strength in technology stocks has stimulated a lot to question whether the rally is driven by a wide swath of stocks or just a little powerful. But the answer is not simple – and depends on which measure of investors' breadth of the market investors look at.
The new York Stock Exchange Advance-Deckline (A/D) rose a new-one-wide stock market breadth indicators measuring the difference between the number of moving forwards and a decline-to a peak ever on Thursday, when the S&P 500 and the NASDAQ compound of the NASDAQ Tesposite for Shiffe for Shiffe Teshed Teshed Teshed Teshed Teshed Teshed Teshed Teshed Shiffed tested.
Tom Essaye, founder and president of Sevens Report Research, said the new highlights at the NYSE A/D line show that the recent progress towards record territory is “broad,” and should be considered “historically healthy and likely to be sustainable.”
Strong gains in the recurring sectors since the lows of April also suggest that the record installation rally is not completely restricted to megacap technology stocks.
The S&P 500 XX: SP500.20 industries sector has risen by almost 27% since April 8, while the Financial XX: SP500.40 and XX Materials: SP500.15 sectors are also up almost 19% in the same period, according to FactSet data.
However, while the NYSE A/D line shows a positive breadth in the stock rally, the reading on the percentage of S&P 500 stocks that trade above their 200 -day moving averages offers a reason for anxiety.
Only about 50% of S&P 500 stocks on Thursday traded above their 200-day moving averages (DMA) -Hell below the early highlights in May, according to data compiled by Sevens Report Report Research.
Typically, a healthy market sees between 65% to 80% of S&P 500 stocks trading above their 200-DMA. The 200 -day moving average is usually considered a key indicator for determining the overall long -term trends of security.
“The diversion between NYSE A/D Bullish Line Reading recently in the percentage of S&P 500 stocks trading above their 200-DMA is a matter of concern that the rally off the lows of April has been due to a combination of real strength in some corners of the market, but simply anti-trend, the client is said.
“For the bulls, the best case scenario for the S&P 500 stocks trading above their 200-DMAS to rise beyond the May 55%highlights,” he added.
Meanwhile, the S&P 500 Equal Weight Index: SP500EW-which provides equal value to each of the stocks included in the S&P 500, regardless of the size of the company-raised 18.7% since April 8.
“We need to see continuity at the rally across some other sectors, apart from technology or communication only,” Ben Fulton, CEO of Webs Investments Inc. told Marketwatch in a telephone interview on Friday. But he added that the Federal Fund's interest rate cuts would still be “necessary for any of the falling back -up and financing stock sectors” to keep up with technology stocks.
To be sure, investors have been growing more confident in the forecasts for the US economy ever since President Donald Trump softened his stance on sweeping tariffs and hit trade deals with some of the main US trading partners, including China and the UK
US stocks finished higher on Friday, with the three large stock indexes ordering strong weekly earnings. The S&P rose by 500 3.4% for the week, while the Dow Jones industrial average DJIA was up 3.8% and the NASDAQ compound increased by 4.3%, according to FactSet data.
