A Historic Week for U.S. Stocks
Easing Middle East tensions and sliding oil prices fueled optimism, pushing the S&P 500 to three consecutive daily record highs starting on Wednesday. The index finished 4.5% higher for the week, and the Nasdaq’s 6.8% rise also pushed that index to record heights. Year to date, the S&P 500 is ahead 4.1% while the Nasdaq Composite is up 5.25%.
Friday’s rally marked the 13th positive trading session in a row for the Nasdaq, the longest such streak since 1992. Each of the major U.S. indexes climbed more rapidly during that stretch than they declined beginning in late February as tensions rose in the Middle East.
Oil Continues to Slide
A two-week decline in oil prices accelerated on Friday as shipping disruptions eased in the Strait of Hormuz. U.S. crude was trading around $83 per barrel on Friday afternoon, down from around $96 a week earlier and a recent peak of about $113 on April 7. On a year-to-date basis, oil was still up more than 40% as of Friday.
Growth and AI Stocks Lead the Way
Growth stocks outpaced their value counterparts by a wide margin for the third week in a row, supported in part by ongoing enthusiasm around artificial intelligence-linked stocks. The Nasdaq Composite finished 6.84% higher for the week versus a 2.4% rise for a value index.
The leading sectors were Information Technology, up 8.1%, followed by Consumer Discretionary, up 6.8%, and Communication Services, up 6.3%. Semiconductor stocks also contributed meaningfully, with the PHLX Semiconductor ETF rising 7.5%, reinforcing the strength of the broader AI trade.
Small Caps Hit a Record High
The Russell 2000 small-cap stock index climbed to a record high on Thursday, surpassing its prior peak set nearly two months earlier. The Russell 2000 climbed 5.6% for the week. Just four weeks earlier the index had entered a correction after falling 10% below its recent peak. The index is now up 11.9% year to date.
The VIX finished near 17.50, down from 19.33 at the close the previous week. Over the last three weeks that index has fallen from a peak of 31.65 to a low of 16.87, a dramatic reversal in investor fear.
Key Technical Levels to Watch
SPX support near 7,045, 7,008, 6,950, and 6,905. Resistance appears near 7,145-50 and 7,190-7,200.
Nasdaq 100 support at 26,480, 26,400, and 26,200. Resistance at 26,700 and 27,000.
In any case, as we always do at TheTechTrader.com, we’ll “Trade What We See, Not What We Think.”
— =HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com
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