AI Leaders Drive Record Highs as S&P 500 Bulls Target 8,150

AI Leaders Pull the S&P 500 Index Higher as Intel and Qualcomm Lag

The AI rotation continues. Today Cisco is the standout, up 13.47% after strong earnings, better guidance, and AI infrastructure demand gave the stock a proper re-rating. In addition to that Nvidia is up 4.00% after reports that the US clear H200 AI chip sales to some Chinese firms, while Broadcom (+3.88%) is increasing due to fresh AI semiconductor optimism and analyst target hikes. Oracle (+4.09%) has the same story, with traders still leaning into its AI cloud infrastructure angle.

But everyone isn’t seeing green. Intel (-3.12%) and Qualcomm (-5.36%) show that there’s profit taking and competitive concern among the tech group. Also, ASML, which is down about 4.00%, has some Chinese export control wrinkles.

Nonetheless it’s another all time high for the S&P 500 Index.

S&P 500 Heat Map Shows AI-Linked Strength in Nvidia, Broadcom, Cisco and Oracle, While Intel, Qualcomm and ASML Remain Under Pressure

US Retail Sales Cool but Stay Positive

The retail sales figure matched the 0.5% month over month forecast. It’s much lower than the April’s print which is a bit worrying. But not too much. The consumer is still alive and possibly well with crude oil prices trading around the $100 mark. How long can the US households and consumers take this scenario? We’ll find out sooner rather than later.

US Retail Sales Rose 0.5% Month-Over-Month in May, Matching Forecasts But Slowing Sharply from April’s 1.6% Jump

S&P 500 Pushes Higher as Breadth Trails the Rally

Market breadth seems to be picking up as it is inching away from the 40% level. But 42.6% is just less bad. It should be good. We need market breadth to pick back up over the 50% line. We need that broad participation so that the Index isn’t just relying on a handful of stocks to carry it to more new all time highs.

S&P 500 Daily Chart Shows the Index Above Its 20,50,100 and 200-Day Moving Averages, While Only 42.6% of Stocks Trade above their 20-MA

S&P 500 Renko Rally Stretches Above 7,500

I increased the brick size of the S&P 500 Index to reduce whipsaws in the chart. The Index remains in a very strong uptrend with the Renko bricks being above both the 50-SMA and 500-SMA. The S&P 500 Index is making all time highs. Again. The most bullish thing an instrument can do is go up. And that’s what the Index is doing. RSI and Z-Score SMA are both elevated so look for bearish divergence or a cross under the RSI overbought levels.more than likely the Index will retrace to the Supertrend boundary and if that breaks that support would be observed around the upwardly trending 50-SMA.

20-Brick Renko Chart Shows S&P 500 Filled with Demand

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 7,100, 6,625

Resistance Levels: 7,450, 8,150

Medium Term Path: The current trend direction is safely bullish with my eyes set on the 8,150 target after the S&P 500 Index pushed through 7,450. I would like to see the short term market breadth improve considerably. And by considerably I mean an increase towards 60%. But other than that the dips can be bought once we know that it’s only a couple names holding things together.