Technology helped markets surge higher this week, while energy sank. Are equities going to stay at a higher altitude after a robust earnings season?
Monday
S&P 500 0.00% | NASDAQ 0.00%
Memorial Day – Markets Closed
Tuesday
S&P 500 0.61% | NASDAQ 1.19%
Markets picked up speed on the back of a stabilized consumer confidence reading in May. Additionally, momentum carried over from the weekend surrounding progress between the U.S. and Iran. Brent Oil futures continue to oscillate around $100/barrel in ongoing tests of commodity values.
Wednesday
S&P 500 0.02%| NASDAQ 0.07%
Markets were up slightly on the day but pushed to record highs. A risk-on appetite has developed after positive earnings from major companies from Q1. The balance between pre-Iran conflict earnings being released (positive) and post-Iran inflation (higher) continues.
Thursday
S&P 500 0.58% | NASDAQ 0.91%
The economic calendar was full on Thursday as inflation moved higher in May, evading hopes of deceleration. The increase in prices has suggested that inflation, primarily in energy and food, could sustain longer than expected. Equities, however, brushed off the negative news following a robust reading of Durable Goods Orders (double projections).
Friday
S&P 500 0.22% | NASDAQ 0.20%
Weekly gains lifted the Dow Jones, S&P500, and Nasdaq to record highs. Notable gainers on Friday included Dell (DELL) after earnings blew through forecasts. The 10-year treasury slid lower after the mortgage rate benchmark set yearly highs last week.
Conclusion
S&P 500 1.43% | NASDAQ 2.39%
This week was highlighted by another surge in technology while energy took the back seat, falling over 5%. While officials seek to solidify a resolution in the middle east, U.S. equities have only climbed higher. AI and technology spending have translated into high valuations after earnings confirmed sentiment for future growth. The downside to red-hot growth, however, could result in higher prices over time. Technology has been the beneficiary of flows, allowing all ships to rise with the tide. The sector underscores the importance technology plays in building efficiencies and long-term profitability. It isn’t, however, immune to inflationary pressures as energy and chip-demand could go higher in the near-term. Competing views could tug at sector growth going into June and the summer season.
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