Markets Rise as S&P 500 and Nasdaq Extend Winning Streak to Six Weeks

Markets Rise as S&P 500 and Nasdaq Extend Winning Streak to Six Weeks

Markets rallied for the week, supported by strong corporate earnings and positive economic data, with the S&P 500 and Nasdaq extending their winning streak to six consecutive weeks and finishing at record highs. Global equities, as measured by the MSCI ACWI, advanced about 2.4%, while domestic large-cap stocks, represented by the S&P 500, gained just over 2.3%. The technology-heavy Nasdaq and emerging markets were the standout performers, rising 4.5% and just under 7%, respectively.

Earnings Momentum Builds

As the first-quarter earnings season nears completion, results have come in notably strong, with 89% of S&P 500 companies reporting and 84% exceeding earnings expectations, well above the five-year average. The blended earnings growth rate is tracking near 28%, potentially marking the strongest growth since 2021, with 10 of 11 sectors posting positive year-over-year gains and seven in double digits. Technology has been a clear leader, driven by a powerful AI investment cycle, which has helped fuel a sharp rally in semiconductors, with the Philadelphia Semiconductor Index rising more than 10% last week and approximately 65% year to date.

Spending Beats Expectations

Labor market data remained broadly resilient but mixed, as initial jobless claims rose modestly to 200,000, below expectations, while continuing claims declined to 1.77 million, the lowest level since 2024. Nonfarm payrolls increased by 115,000 in April, beating forecasts and marking the second consecutive month of gains, with upward revisions to March reinforcing the strongest two-month hiring period since 2024, while the unemployment rate held at 4.3%. However, labor force participation declined to its lowest level since October 2021, layoffs rose month over month but remained lower year over year, particularly in technology, and productivity growth slowed to a 0.8% annualized pace in the first quarter, pointing to a gradually cooling but still stable labor backdrop.

Consumer Sentiment Falls

Consumer sentiment weakened sharply, as the University of Michigan’s index fell to 48.2 in early May, its lowest level on record, with survey responses highlighting concerns around higher gasoline prices and tariffs as key drivers of the decline.

Looking Ahead

Looking ahead, A closely watched Consumer Price Index report due Tuesday will provide insight into whether recent inflation pressures carried into April, following a March reading that showed annual inflation accelerating to 3.3% from 2.4%, driven in part by a 12.5% year-over-year increase in energy prices.

As Always

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.