Weekly Wrap

The stock market finished the week with modest gains, though the path higher was far from smooth. The S&P 500 (+0.9%) extended its winning streak to eight weeks, while the DJIA (+2.1%) climbed to fresh record highs. The Nasdaq Composite (+0.5%) underperformed somewhat as leadership across mega-cap technology and AI-linked stocks became more mixed following NVIDIA's closely watched earnings report.

Importantly, market participation broadened throughout the week. The Russell 2000 (+2.5%) and S&P Mid Cap 400 (+1.8%) both outperformed, while the equal-weighted S&P 500 frequently outpaced the market-cap weighted index as investors rotated into rate-sensitive and economically sensitive areas outside of mega-cap tech.

Much of the week's volatility revolved around shifting headlines tied to U.S.-Iran negotiations. Oil prices and Treasury yields swung sharply throughout the week as reports alternated between signs of progress and renewed tension. Ultimately, WTI crude oil retreated roughly 8% for the week, helping ease inflation concerns and relieving some of the upward pressure that had recently pushed Treasury yields to fresh highs for the year.

That backdrop supported several rate-sensitive groups. The iShares U.S. Home Construction ETF surged 5.2% as homebuilders rallied alongside falling yields, while the real estate sector (+3.0%) and utilities sector (+3.3%) both posted strong gains. Financials (+1.6%) and consumer discretionary (+1.9%) also participated in the advance, with the State Street SPDR Retail ETF climbing 4.4%.

Technology stocks still contributed positively overall, though leadership narrowed as the week progressed. The information technology sector rose 1.0%, while the PHLX Semiconductor Index gained 5.3% thanks to strong rebounds in semiconductor names ahead of NVIDIA's earnings report. However, NVIDIA's muted post-earnings reaction highlighted increasingly elevated expectations surrounding the AI trade, even after another standout quarterly report.

Meanwhile, the communication services sector (-1.8%) lagged amid weakness in Alphabet. The Vanguard Mega Cap Growth ETF finished only modestly higher (+0.5%), reflecting the market's broader rotation away from narrow mega-cap leadership.

Elsewhere, health care (+3.3%) emerged as one of the week's strongest sectors as investors balanced growth exposure with more defensive positioning. Consumer staples (-1.0%) lagged, while the energy sector (-0.4%) finished slightly lower after sharp midweek declines in crude oil prices erased earlier strength tied to geopolitical tensions.

Overall, the week reflected a healthier broadening in market participation even as macro uncertainty remained elevated. Falling oil prices, easing pressure on Treasury yields, resilient earnings results, and continued dip-buying across select technology names helped support equities despite persistent concerns surrounding inflation, monetary policy, and geopolitics.

• Russell 2000: +2.5% week-to-date
• DJIA: +2.1% week-to-date
• S&P Mid Cap 400: +1.8% week-to-date
• S&P 500: +0.9% week-to-date
• Nasdaq Composite: +0.5% week-to-date

Monday:

The stock market started the week on shaky footing, with tech weakness and shifting geopolitical developments leading the S&P 500 (-0.1%), Nasdaq Composite (-0.5%), and DJIA (+0.3%) to a mostly lower finish.

Oil prices experienced volatility today in response to headlines surrounding the state of negotiations between the U.S. and Iran. Oil initially moved lower amid reports of potential sanction easing and an unconfirmed modified peace plan, but subsequent reports indicated the two sides remain far apart on negotiations.

Crude oil futures settled today's session $3.26 higher (+3.1%) at $108.75 per barrel, but oil prices moved lower late in the afternoon after President Trump wrote on Truth Social that he has called off planned military strikes against Iran "in that serious negotiations are now taking place."

The headline helped stocks move off their worst levels of the session late in the afternoon.

The information technology sector (-1.0%) still closed with the widest loss, but recovered nearly half of its previous weakness. Semiconductor stocks faced a continuation of Friday's losses, with the PHLX Semiconductor Index finishing 2.5% lower.

Seagate Tech (STX 740.50, -54.97, -6.91%) underperformed after Bloomberg reported that the company's CEO said building new factories "would take too long" when asked how Seagate plans to keep pace with surging memory demand, which weighed on other memory names.

Lumentum (LITE 884.98, -85.72, -8.83%) was the worst performer in the sector as electrical product names, which have increasingly moved in lockstep with semiconductor names, also retreated today. That weakness weighed on Vertiv (VRT 339.73, -31.21, -8.41%) and other related names, contributing to weakness in the industrials sector (-0.4%).

Losses were more modest elsewhere, with the consumer discretionary sector (-0.2%) pressured by weak leadership from Tesla (TSLA 410.06, -12.18, -2.88%), while the materials sector (-0.1%) finished just slightly lower.

Meanwhile, the broader market showed resilience despite the oil-driven volatility and tech weakness, with seven S&P 500 sectors finishing higher.

The financials sector (+1.2%) was supported by another strong showing from financial services names such as FactSet (FDS 224.35, +11.77, +5.54%), while the consumer staples sector (+1.3%) moved higher in broad fashion, and the real estate sector (+1.1%) rebounded from Friday's rate-driven weakness.

The energy sector (+1.8%) captured the widest gain amid the increase in oil prices today.

Outside of the S&P 500, the S&P Mid Cap 400 (-0.2%) finished modestly lower, while the Russell 2000 (-0.7%) lagged amid the weakness in growth stocks today.

Even with the market's recent leaders facing pressure today, the broader market helped stabilize the major averages, as highlighted by the outperformance of the S&P 500 Equal Weighted Index (+0.6%) relative to the market-weighted S&P 500 (-0.1%). With analyst commentary increasingly focused on the narrow leadership behind the market's recent record highs, today's session offered some encouragement for broader participation amid rotational buying across several sectors.

Attention will now increasingly shift toward NVIDIA's (NVDA 222.36, -2.96, -1.31%) earnings report later this week, which could play a major role in determining whether momentum across the AI trade reaccelerates.

U.S. Treasuries started the week on a quiet note, giving in to modest selling pressure that kept the market from building on its early strength. The 2-year note yield settled up one basis point to 4.09%, and the 10-year note yield settled up three basis points to 4.62%.

• Nasdaq Composite: +12.3% YTD
• Russell 2000: +11.8% YTD
• S&P Mid Cap 400: +9.0% YTD
• S&P 500: +8.1% YTD
• DJIA: +3.4% YTD

Reviewing today's data:

• The NAHB Housing Market Index rose to 37 in May (Briefing.com consensus 34) from 34 in April.

Tuesday:

The S&P 500 (-0.7%), Nasdaq Composite (-0.8%), and DJIA (-0.7%) finished lower today, pressured by rising yields and weakness across mega-cap stocks.

The communication services (-1.6%) and consumer discretionary (-1.3%) sectors were hindered by weak leadership across their largest components, including Alphabet (GOOG 384.90, -8.21, -2.09%) and Amazon (AMZN 259.34, -5.52, -2.08%). The Vanguard Mega Cap Growth ETF finished 0.9% lower, contributing to losses at the index level.

Notably, the information technology sector (-0.7%) finished with a more modest loss despite early-session weakness. Semiconductor names opened with a continuation of yesterday's decline, though buyers began stepping in late in the morning. The PHLX Semiconductor Index (flat) reversed a significant early drop and climbed as much as 1.5% at its intraday highs, helping the major averages briefly approach their flatlines. Memory names such as Sandisk (SNDK 1383.29, +50.28, +3.77%) and Micron (MU 698.74, +17.20, +2.52%) led the advance, while Intel (INTC 110.80, +2.63, +2.43%) also notched a nice gain.

Session highs did not hold, however, and the major averages finished firmly lower.

Other laggards include the materials sector (-2.3%), which posted the widest loss as nearly all of its components traded lower. Construction materials names such as DuPont (DD 46.56, -2.08, -4.28%) and CRH Plc. (CRH 98.53, -4.86, -4.70%) were among the weakest performers as another rise in Treasury yields pressured rate-sensitive and cyclical areas tied to housing and construction demand.

The iShares U.S. Home Construction ETF finished 1.5% lower.

Builders FirstSource (BLDR 66.39, -3.79, -5.40%) was a notable laggard in the industrials sector (-1.2%), while asset managers, which are sensitive to higher interest rates through their impact on market levels and assets under management, also came under pressure alongside broader weakness in the financials sector (-1.2%).

Meanwhile, strength was concentrated across more defensive holdings. The health care sector (+1.1%) captured a nice gain, with its largest component Eli Lilly (LLY 1021.59, +33.50, +3.39%) rebounding nicely from yesterday's slide, while the utilities sector (+1.0%) captured a similar gain.

The real estate (+0.5%) and consumer staples (+0.4%) sectors notched more modest gains.

The energy sector (+1.0%) finished as one of the top performers as oil reversed earlier losses. The morning was relatively quiet on the geopolitical front, but reports that the U.S. and Iran remain far apart in negotiations began to trickle in later in the session. Crude oil futures settled today's session near their best levels, $0.16 lower (-0.2%) at $108.59 per barrel.

Outside of the S&P 500, the Russell 2000 (-1.0%) and S&P Mid Cap 400 (-1.0%) underperformed amid the weakness in growth stocks and upward pressure on Treasury yields.

Overall, today's session highlighted continued sensitivity to interest rates and mega-cap leadership, with defensive sectors providing stability while growth stocks and cyclicals remained under pressure. Going forward, the market remains focused on whether rising yields will continue to cap upside momentum or whether investors step in with a more meaningful buy-the-dip bid across recent market leaders.

U.S. Treasuries extended their recent losses on Tuesday, lifting yields to fresh highs for the year with the 30-year yield reaching a level not seen in almost 20 years. The 2-year note yield settled up three basis points to 4.12%, the 10-year note yield settled up four basis points to 4.67%, and the 30-year note yield settled up three basis points to 5.18%.

Reviewing today's data:

• Pending Home Sales rose 1.4% month-over-month in April (Briefing.com consensus 1.6%) while the March increase was revised up to 1.7% from 1.5%.

Wednesday:

Stocks posted a strong session today, with the S&P 500 (+1.1%), Nasdaq Composite (+1.5%), and DJIA (+1.3%) finishing near their best levels as tech and mega-cap names rebounded from recent weakness while an improving macro backdrop supported broader market gains.

Investors bought into semiconductor stocks from the opening bell, with NVIDIA's (NVDA 223.33, +2.72, +1.23%) earnings report after the close acting as a catalyst amid expectations for another blowout quarter. Advanced Micro Devices (AMD 447.58, +33.53, +8.10%) and Intel (INTC 118.96, +8.16, +7.36%) were among the information technology sector's (+1.9%) top performers, as the PHLX Semiconductor Index (+4.5%) moved into positive territory for the week.

Several mega-cap names elsewhere also received some "buy-the-dip" attention this morning, including Tesla (TSLA 417.26, +13.15, +3.25%) and Amazon (AMZN 265.01, +5.67, +2.19%), helping the Vanguard Mega Cap Growth ETF (+1.4%) move into positive week-to-date territory as well.

The consumer discretionary sector (+2.5%) was already off to a strong start as a result.

Momentum accelerated just before midday after President Trump told reporters on Air Force One that the U.S. is in the "final stages" of talks on Iran, which sent oil prices and Treasury yields sharply lower after both had already been trending modestly downward.

Crude oil futures settled today's session $5.96 lower (-5.7%) at $98.19 per barrel, and the 10-year note yield settled down ten basis points to 4.57%.

Cruise lines such as Norwegian Cruise Line (NCLH 16.04, +1.24, +8.42%) and Carnival (CCL 26.04, +2.14, +8.98%) moved sharply higher, while homebuilders including Lennar (LEN 87.32, +4.32, +5.20%) and D.R. Horton (DHI 141.78, +7.06, +5.24%) also outperformed, helping the consumer discretionary sector build on its strong start and finish as the best-performing S&P 500 sector.

The iShares U.S. Home Construction ETF finished 4.5% higher.

The intraday retreat in yields and oil prices helped the broader market move firmly higher after a somewhat muted start. United Airlines (UAL 98.02, +8.90, +9.99%) and Delta Air Lines (DAL 74.12, +6.36, +9.39%) were among the best-performing S&P 500 components, contributing to strength in the industrials (+1.2%), while a rebound in container and packaging names pushed the materials sector (+1.4%) higher, and the real estate sector (+1.2%) benefited from the retreat in yields.

Weakness was limited to the energy sector (-2.6%) amid the plunge in oil prices, while the defensive consumer staples (-1.0%) and health care (-0.1%) sectors were overlooked in favor of more growth-oriented stocks today.

The consumer staples sector was also pressured by weakness in Target (TGT 122.33, -4.91, -3.86%) despite the company posting a solid beat-and-raise earnings report, while Walmart (WMT 130.85, -3.35, -2.50%) traded lower ahead of its earnings tomorrow morning.

Outside of the S&P 500, the Russell 2000 (+2.6%) and S&P Mid Cap 400 (+1.9%) outperformed amid the more favorable interest rate backdrop.

Stocks posted wins on multiple fronts today, which helped the major averages move into positive territory for the week. While there is still a lack of clarity around the state of negotiations between the U.S. and Iran, today's slide in oil prices alleviated some upward pressure on Treasury yields that were becoming increasingly viewed as a material headwind for equities.

Additionally, investors continued to buy dips across semiconductor and mega-cap stocks, with NVIDIA's upcoming earnings release serving as an additional potential catalyst for the group.

U.S. Treasuries climbed on Wednesday, bouncing from a slide that lifted yields to fresh 2026 highs earlier this week. The market held its ground through today's $16 billion 20-year bond auction, which met good demand, while the April FOMC Minutes showed some division among policymakers about the future rate path, which was not a surprise. The 2-year note yield settled down eight basis points to 4.04%, and the 10-year note yield settled down ten basis points to 4.57%. 

Reviewing today's data:

• April Pending Homes Sales 1.4% (Briefing.com consensus 1.6%); Prior was revised to 1.7% from 1.5%

Thursday:

The stock market had a relatively eventful session, with a slate of noteworthy earnings reports and plenty of oil-driven volatility leading to some choppy action. The S&P 500 (+0.2%), Nasdaq Composite (+0.1%), and DJIA (+0.6%) finished the session modestly higher, with the DJIA notching a record closing high. The Russell 2000 (+0.9%) outperformed, and the S&P Mid Cap 400 (+0.1%) finished flattish.

Stocks opened broadly lower as oil prices and Treasury yields surged following a Reuters report that Iran's Supreme Leader said the country's enriched uranium should remain in Iran. That report was later disputed, allowing oil prices and Treasury yields to stabilize, though stocks remained mostly lower through the morning. Sentiment shifted again shortly after midday, when reports from Middle Eastern sources indicated that a final draft of a mediated peace agreement between the U.S. and Iran could be announced within hours.

Stocks moved broadly higher as yields and oil moved lower, with crude oil futures settling today's session $1.91 lower (-2.0%) at $96.28 per barrel.

Eight S&P 500 sectors finished in positive territory. Unsurprisingly, the energy sector (-1.0%) reversed its early gain amid the intraday retreat in oil prices, while the consumer staples sector (-1.6%) finished sharply lower as Walmart (WMT 121.32, -9.53, -7.29%) disappointed investors with its Q1 earnings report.

The company reported in-line EPS on above-consensus revenue, issued below-consensus EPS guidance for Q2, and reaffirmed its EPS guidance for FY27, ultimately finishing as one of the worst-performing S&P 500 names.

The industrials sector (-0.1%) also faced some post-earnings weakness from Deere (DE 531.41, -29.05, -5.18%) after the company topped estimates and reaffirmed its full-year earnings guidance.

Meanwhile, the top-weighted information technology sector (+0.3%) managed to notch a modest gain despite NVIDIA (NVDA 219.51, -3.96, -1.77%) moving lower after its own eagerly anticipated earnings report.

The company delivered another standout beat-and-raise report, which included a massive jump in revenues and impressive forward guidance. However, the stock struggled to build on recent gains as investors have increasingly come to expect blowout results from NVIDIA, especially with shares entering earnings near record highs after an extended rally tied to AI enthusiasm.

Other semiconductor names faced some choppiness with the broader market, but finished the day as relative outperformers, with the PHLX Semiconductor Index advancing 1.3%.

Elsewhere in the technology sector, shares of IBM (IBM 253.02, +28.02, +12.45%) soared after the company and the U.S. Department of Commerce confirmed plans to build America's first purpose-built quantum foundry, supported by a proposed $1 billion CHIPS award.

Ralph Lauren (RL 374.80, +45.56, +13.84%) captured a similar gain after a strong earnings beat, while Williams-Sonoma (WSM 191.92, +11.68, +6.48%) moved higher after earnings. The stocks led strength in the consumer discretionary sector (+0.8%), which was also supported by strength across oil-sensitive and rate-sensitive names.

The defensive utilities sector (+1.0%) outperformed this morning as the broader market lagged, trading in a steady range throughout the session.

Overall, today's session reflected a market still highly sensitive to shifts in the macro backdrop, with intraday swings in oil prices and Treasury yields driving much of the action. Even so, continued strength across semiconductors and selective post-earnings winners helped support broader participation, while NVIDIA's muted reaction despite another exceptional report underscored how elevated expectations remain across the AI trade.

U.S. Treasuries endured some volatility on Thursday, but longer tenors ultimately reclaimed their early weakness while shorter tenors recovered some of their losses but could not avoid a lower finish. The 2-year note yield settled up five basis points to 4.09%, and the 10-year note yield settled up one basis point to 4.59%.

Reviewing today's data

• April Housing Starts 1.465 mln (Briefing.com consensus 1.420 mln); Prior was revised to 1.507 mln from 1.502 mln, April Building Permits 1.442 mln (Briefing.com consensus 1.380 mln); Prior was revised to 1.363 mln from 1.372 mln
  • The key takeaway from the report is that there was broad-based weakness across all regions for both single-family starts and single-family building permits, underscoring the headwind posed for builders by rising costs for financing, materials, and labor.
• Weekly Initial Claims 209K (Briefing.com consensus 210K); Prior was revised to 212K from 211K, Weekly Continuing Claims 1.782 mln; Prior was revised to 1.776 mln from 1.782 mln
  • The key takeaway from the report is that there is nothing to see here, meaning there is nothing in these latest numbers that would suggest there has been a sea change in a labor market environment that remains characterized by low firing and low hiring activity.
• May Philadelphia Fed Index -0.4 (Briefing.com consensus 15.5); Prior 26.7
• May S&P Global U.S.Manufacturing PMI - Prelim 55.3; Prior 54.5
• May S&P Global U.S. Services PMI - Prelim 50.9; Prior 51.0

Friday:

The S&P 500 (+0.4%), Nasdaq Composite (+0.2%), and DJIA (+0.6%) traded in a relatively stable range today, locking in weekly gains that extend the S&P 500's winning streak to eight weeks and pushing the DJIA to fresh record highs. The Russell 2000 (+0.9%) and S&P Mid Cap 400 (+0.8%) outperformed.

Despite mixed performances across mega-cap stocks and heightened expectations for a rate hike later in the year, the broader market showed resilience, with nine S&P 500 sectors finishing higher.

Earnings and several other corporate news items of note contributed to the advance.

Within the information technology sector (+0.5%), hardware names such as Dell (DELL 295.25, +42.45, +16.79%) and HP Inc. (HPQ 25.24, +3.34, +15.27%) led the way after rival Lenovo (LNVGY 39.96, +6.04, +17.81%) posted an encouraging earnings report.

Workday (WDAY 128.14, +6.29, +5.16%) moved higher after topping its own earnings estimates, which contributed to strength across software names in the iShares GS Software ETF (IGV 93.98, +1.50, +1.62%).

It is worth noting the PHLX Semiconductor Index (+1.9%) posted a solid gain as well, though NVIDIA (NVDA 215.33, -4.18, -1.90%) has yet to garner any buy-the-dip interest following its own earnings report earlier in the week, which somewhat limited the technology sector's gain today.

Alphabet (GOOG 379.38, -4.09, -1.07%) was the other mega-cap laggard today, which contributed to weakness in the communication services sector (-0.7%). The Vanguard Mega Cap Growth ETF (+0.2%) finished modestly higher.

The broader market, however, traded in a stable range, which contributed to the outperformance of the S&P 500 Equal Weighted Index (+1.0%) relative to the market-weighted S&P 500 (+0.4%).

The health care sector (+1.2%) captured the widest gain as Merck (MRK 122.42, +6.54, +5.64%) moved higher following some positive updates to its oncology drugs, while the utilities sector (+0.8%) was supported by strength in electric utilities names.

The industrials sector (+0.7%) rounds out today's top performers, with Generac (GNRC 270.21, +22.42, +9.05%) trading sharply higher after Jefferies upgraded the stock to Buy from Hold.

Importantly, stocks showed resilience despite some hawkish developments on the monetary policy front. Fed Governor Christopher Waller (voting FOMC member) said that he would need to see considerable improvements in inflation to consider a rate reduction, which weighed on shorter-tenor Treasury yields today. Inflation concerns were also reflected in the final May reading for the University of Michigan Consumer Sentiment Index, which fell to a record-low 44.8 as rising gas prices helped push year-ahead inflation expectations to an elevated 4.8%.

The CME FedWatch Tool is now assigning a 52.7% probability to a rate hike at the October FOMC meeting, with that probability rising to 74% by the January 2027 meeting.

That backdrop creates a challenging environment for new Fed Chair Kevin Warsh, who was sworn in today.

For the time being, stocks continue to draw support from solid earnings results and generally stable oil prices, with crude oil ultimately retreating for the week despite several bouts of geopolitical volatility. The market also heads into the weekend with little in the way of material developments surrounding U.S.-Iran negotiations, though Secretary of State Marco Rubio said that "slight progress" has been made in talks between the two sides.

As a reminder, the market will be closed Monday, May 25, for Memorial Day.

U.S. Treasuries had a mixed showing to end the week with the 5-year note and shorter tenors recording losses while 10s and 30s outperformed, finishing in the green. The Treasury complex was eager to continue trimming this week's losses at the start of the session, but the higher open was rebuffed quickly, sending shorter tenors into the red in mid-morning trade. The 2-year note yield settled up two basis points to 4.12% (+4 basis points this week), and the 10-year note yield settled down three basis points to 4.56% (-4 basis points this week).

Reviewing today's data:

• The final reading for the University of Michigan Consumer Sentiment Index for May dropped to 44.8 (Briefing.com consensus: 48.2) from the preliminary reading of 48.2, marking a new historic low. The final reading for April was 49.8. In the same period a year ago, the index stood at 52.2.
  
  • The key takeaway from the report is that consumers are clearly concerned about rising costs and their ability to out-earn inflation, which they are concerned will increase beyond fuel prices.
• The April leading Economic Index checked in at 0.1% (Briefing.com consensus -0.3%), from the prior reading of -0.6%.