Stock market bulls regained momentum last week, propelling the S&P 500 toward potential record highs. The index has experienced a remarkable ascent over the past eight weeks since bottoming out at the end of March, marking its longest winning streak since late 2023. Following a modest gain on Friday, the S&P 500 now sits less than 0.4% shy of its record closing high of 7,501, set on May 14.
The week began with uncertainty in the market, driven by rising oil prices and bond yields. Oil prices surged above $100 a barrel, while the 30-year Treasury yield reached its highest level since 2007. This volatility negatively impacted stocks, leading the S&P 500 to conclude Tuesday with a three-session losing streak reminiscent of earlier turmoil during the Iran conflict.
However, the market experienced a turnaround on Wednesday, with oil prices and bond yields retreating. Investor sentiment was buoyed when President Donald Trump indicated that the U.S. was nearing a resolution in its peace talks with Iran. This shift sparked a rally in the stock market, reminiscent of the upswing seen at the end of March.
In addition to geopolitical factors, corporate developments also played a significant role. Nvidia, a leading name in the artificial intelligence sector, reported strong earnings on Wednesday evening, exceeding analyst expectations. CEO Jensen Huang described the demand for Nvidia’s products as “parabolic.” Nonetheless, despite the strong report, Nvidia’s stock fell 2.6% on Thursday and an additional 0.5% on Friday.
In contrast, shares of Arm, Nvidia’s partner, saw a substantial increase, surging more than 16% after Nvidia’s earnings announcement. Nvidia’s promising forecast for its Arm-based Vera CPUs highlighted growth potential, leading to optimistic projections for Arm’s revenue.
Furthermore, in a noteworthy development, SpaceX filed for its initial public offering (IPO) on Wednesday, with Goldman Sachs as the lead underwriter. This IPO is expected to be the largest in history, potentially raising over $75 billion and significantly enriching Goldman Sachs as they stand to gain considerable fees from their involvement.
The week also marked a resurgence in cybersecurity stocks, notably CrowdStrike, which experienced a nearly 12% increase in share price as analysts issued optimistic forecasts. A growing awareness that cybersecurity firms may thrive amid rising AI adoption bolstered investor confidence. Several major financial institutions raised their price targets for CrowdStrike, with notable increases reflecting an improved outlook for cybersecurity demands.
Goldman Sachs’ success in deal-making, particularly with involvement in high-profile IPOs, underpinned its stock’s upward trajectory, which rose about 5% throughout the week. The successful earnings report from Nvidia and CrowdStrike’s impressive performance highlights the underlying optimism present in the market, despite initial concerns over rising oil prices and bond yields.
As the S&P 500 climbed 0.9% over the week, the tech-heavy Nasdaq and the Dow Jones Industrial Average saw respective increases of 0.5% and 2.1%. The Dow, buoyed by strong performances including that of Goldman Sachs, ended the week at a record high.
Overall, this week’s market dynamics illustrate how quickly investor sentiment can shift based on a combination of geopolitical developments and corporate earnings reports. Analysts remain cautiously optimistic as markets adjust to these rapid changes, particularly within the technology sector. As companies continue to navigate the implications of rising oil prices and interest rates, the coming weeks will be crucial for determining the sustainability of this upward trend.
