S&P 500; US Indexes Fundamental Daily Forecast – Constructive Trend Breakout Led by Technology, Energy Sectors

The major U.S. stock indexes settled mixed on Friday, but nonetheless, all managed to post solid gains for the week.

In the cash market, the benchmark S&P 500 Index settled at 2727.72, up 4.65 or +0.17%. The blue chip Dow Jones Industrial Average closed at 24831.17, up 91.64 or +0.37% and the tech-driven NASDAQ Composite finished at 7401.09, down 3.88 or -0.05%.

The NASDAQ Composite was the leader early in the week, supported by strong buying interest in Apple. However, the S&P 500 Index and Dow took control mid-week when energy stocks rose sharply in response to a surge in crude oil prices.

The S&P 500 Index was supported on Friday by strong performances in the telecommunications and healthcare sectors. The Dow, which posted a seven-day winning streak, was led by gains in Verizon and Merck.

In corporate news, chipmaker Nvidia reported better-than-expected earnings and revenue, while giving upbeat guidance. Shares of Verizon jumped more than 3 percent after analysts at J.P. Morgan upgraded the telecom giant, noting that its heft dividend and 5G network plans will be a boost.

Forecast

Stocks could continue to rally next week with the technology and energy sectors providing the most support.

The technology sector was up 3.5 percent last week, led by large market cap stocks like Facebook and Google-parent Alphabet, which grew by more than 5 percent last week. Additionally, Apple, the biggest U.S. publicly traded company, reached an all-time high this week.

Rising crude oil prices could also lead to more aggressive buying of energy stocks. This would be very supportive for the S&P 500 Index and the Dow.

Last week, President Trump said the U.S. would withdraw from the Iranian nuclear accord and apply sanctions against the nation. This could reduce global crude oil exports by 500,000 to 1,000,000 barrels per day over the long-term. This news combined with the OPEC-led production cuts could drive crude oil price to $80 over the near-term.

Higher oil prices would mean higher profits for oil-related companies, driving their stocks and the entire energy sector higher.

Technical factors could also contribute to higher stock market prices. After trading in a tight range, equities broke out to the upside last week with the Dow and the S&P 500 closing above their 50-day moving averages.