S&P 500: US Stock Market Surges Today as Oil Plunge Lifts Sentiment

Stocks Blast to Record Highs as Iran Reopens the Strait and Oil Collapses

The Strait of Hormuz is open and Wall Street ran with it. Iran signaled the key shipping route would stay open during the ceasefire and equities exploded higher. The Dow Jones Industrial Average jumped 869 points. The S&P 500 broke above 7100 for the first time ever. The Nasdaq Composite hit a new intraday high and extended its winning streak to its longest run since 1992. The Russell 2000 climbed 2% to a record. That’s not a rally. That’s a release.

Winners Spread Across the Market

Cheaper oil drove the move and the winners showed it. Royal Caribbean and United Airlines both posted big gains. Autoliv jumped after beating earnings. Affirm gained on a bullish analyst call. Tesla and Microsoft were among the biggest Magnificent Seven winners. More than 30 S&P 500 stocks hit new 52-week highs including Advanced Micro Devices and Dell Technologies. I haven’t seen breadth like that in a while.

Energy and a Few Earnings Names Fell

Exxon Mobil and Chevron dropped as crude prices fell. Netflix fell after issuing a weaker outlook. Alcoa dropped on an earnings miss. Chemical stocks tied to fertilizer production struggled. Not every sector got to participate Friday and the energy names paid the price for the same headline that sent everything else higher.

Earnings Are the Next Test

The rally needs earnings to keep it going. This market has moved far and fast. Monday’s open will tell us more than anything. Friday’s close was near the highs of the day and that’s a good sign. But one bad headline out of the Middle East can change the mood before the opening bell rings.

Technical Outlook

The S&P 500 Index blasted to a new all-time high at 7147.52, pulling further away from the previous record at 7002.28, which is new support. The benchmark is also well above its 50-day moving average at 6769.15 and its 200-day moving average at 6683.79, which are the next closest support levels.

By some metrics the market is overbought, but as long as it continues to make higher-highs and higher-lows, I don’t think this is an issue. There is no resistance so trying to pick a top is just a guess. If a short-term top is forming, it usually comes in the form of a closing price reversal top or an “M” formation. Today’s close was near the high of the day, well above the session’s mid-point and the opening. This indicates the strong possibility of a follow-through rally on Monday.

More Information in our Economic Calendar.