S&P500 and Nasdaq 100: Tech Stocks Rally as AMD Lifts US Indices

Stocks Surge as Oil Drops and AMD Delivers

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all pushed sharply higher Wednesday as oil prices dropped on Iran peace headlines, AMD beat earnings expectations by a wide margin, and the jobs data held up better than expected. Technology and semiconductor stocks led the move.

Technical Outlook

S&P 500 Index futures (SPX) reaffirmed its uptrend on Wednesday with the surge into 7344.00. The current intraday momentum suggests this price won’t hold as a high either.

On the downside, the series of higher bottoms has created a series of ascending pivot support at 7259.06, 7225.93 and 7195.28. These levels will rise as the market moves higher.

Minor bottom support is 7174.12, 7107.86 and 7046.55.

It makes no sense to try to pick a top even if your overbought indicators are screaming. I think traders tracking these types of indicators are actually feeding the bull because, after all, they need a seller to take new positions.

A top will eventually form, but I think you’d be better off selling or shorting its confirmation rather than trying to pick it. If you are inclined to probe this ranging bull market, looking for weakness and a top, then I think you’d be better off waiting for a closing price reversal top. In the meantime, we’re likely to remain in both a buy the dip and buy the strength market until the pattern breaks. Until then continue to watch the pivots for support. Any breaks in the pattern or through swing bottoms will weaken the bullish picture.

Oil Did the Heavy Lifting

June WTI crude oil futures dropped roughly 5% Wednesday and the stock market felt the relief immediately. Axios reported the U.S. and Iran were nearing a deal that would include limits on Iran’s nuclear enrichment program. Iran’s foreign ministry confirmed it was reviewing a U.S. proposal. Lower energy costs take pressure off inflation, consumer spending, and corporate margins all at the same time and traders know it. President Trump later said a final agreement was still a “big assumption” and stocks trimmed some gains on that comment. But the broader tone stayed positive. The market is trading the direction of the headlines, not the fine print.

AMD Lit Up the Semiconductor Space

Advanced Micro Devices jumped 17% after beating Wall Street estimates on both revenue and profit and issuing a strong outlook for the current quarter. The result answered a question the market had been sitting with since earlier this year. AI infrastructure demand is still real. The VanEck Semiconductor ETF climbed around 3%. Intel gained more than 3%. Nvidia announced a partnership with Corning to expand optical manufacturing capacity across three facilities in North Carolina and Texas. Corning surged 17% on the news. When AMD, Intel, Nvidia, and Corning are all moving in the same direction on the same day, the sector is not quietly recovering. It is running.

Economic Data

ADP reported private employers added 109,000 jobs in April against expectations of 84,000. Hiring is holding up. That number would normally reduce the chances of near-term Federal Reserve rate cuts and traders know that too. Wednesday they looked past it. A market that is focused on peace headlines and blowout chip earnings is not going to sell off because the jobs number came in too strong.

What to Watch

Inflation reports, Federal Reserve commentary, and the next wave of earnings are what determine whether Wednesday’s rally has legs or stalls out near current levels. The ascending pivot support at 7259.06, 7225.93, and 7195.28 is where buyers step in on any pullback. Those levels rise as the market moves higher. Watch the pivots. A break through any of the swing bottoms changes the picture fast.

More Information in our Economic Calendar.