S&P500 and Nasdaq Composite: Tech Earnings Keep Bulls in Control, Offset Middle East Risks

Jobs Beat Sends Stocks to Six Straight Weeks of Gains

The S&P 500 closed at 7,398.93, up 0.84% Friday. The Nasdaq climbed 1.71% to 26,247.08. The Dow edged 0.02% higher to 49,609.16. April payrolls came in stronger than expected, the unemployment rate held at 4.3%, and Wall Street did exactly what it has been doing for six straight weeks. It bought.

The Jobs Number Changed the Rate Conversation

April employment beat expectations and the unemployment rate held at 4.3%. That is not a number that gives the Fed a reason to move. Traders now expect the Fed to hold rates in the 3.50% to 3.75% range through the end of the year and nothing in Friday’s data challenged that. Higher for longer is the operating assumption and the market is fine with it as long as earnings keep coming in the way they have been.

The strong jobs print did one other thing. It pulled money out of defensive positions fast. Utility stocks dropped 0.9% on the session. That is not random. When the economy looks stable and rate cuts are off the table, nobody needs to hide in utilities. The rotation back into growth was immediate and technology absorbed most of it.

Oil and the Middle East Are Still in the Room

Spot Brent crude oil climbed near $100 a barrel Friday as hopes for a quick resolution to the Strait of Hormuz situation faded. The U.S. said it expected a response from Tehran on its latest proposal later in the day. Higher energy prices feed directly into inflation and inflation feeds directly into the Fed’s calculus. The market looked past it Friday because the earnings and jobs data were loud enough to drown it out. That will not always be the case. If Spot Brent crude oil stays near $100 and the Strait stays closed, the inflation story reasserts itself and the rate cut timeline gets pushed further out. I’ve seen this market ignore oil for weeks and then reprice everything in a session when it stops ignoring it.

Technology Is Still Running This Market

The S&P 500 technology sector jumped 2.7% Friday and that is the only number that matters for understanding where this rally is coming from. Artificial intelligence and cloud computing are not slowing down. They are accelerating and the earnings are proving it session by session. Six straight weeks of gains on the S&P 500 and Nasdaq. That is the longest winning streak since October 2024. The S&P 500 is up 8% in 2026. The Nasdaq has surged 13%. Those are not soft numbers built on hope. They are built on earnings that keep coming in above expectations.

Earnings Season Is Running Hot

83% of the 440 S&P 500 companies that have reported first quarter results so far have topped analyst expectations. The long term average is 67%. I’ve been watching earnings seasons for a long time and that gap between 67% and 83% is not noise. That is a broad based beat cycle and it is the foundation under every index high we have seen this month. Companies are delivering solid profits despite elevated borrowing costs and that keeps the buy the dip crowd in control.

The Losers Were Punished Hard

Not every report worked. Cloudflare plunged 24% after announcing plans to cut roughly 20% of its workforce and guiding second quarter revenue slightly below expectations. When a company cuts that many jobs and still can’t find the number Wall Street wants, the market does not give it the benefit of the doubt. Trade Desk fell 1.8% on weak revenue guidance. CoreWeave dropped 11.4% after raising the lower end of its annual capital spending forecast on rising component costs. Expedia fell 9% after warning that Middle East conflict is hurting travel demand. That last one is worth watching. If geopolitical risk starts showing up in consumer behavior the earnings story gets more complicated fast.

Market Breadth Tells a Different Story

Declining stocks outnumbered advancing stocks within the S&P 500 by a 1.4 to one ratio Friday. The index posted 28 new highs and 30 new lows. The Nasdaq put up 134 new highs against 119 new lows. The headline numbers look clean but the internals are telling you this rally is narrow. A handful of technology names are doing most of the work and the rest of the market is not keeping up. That is a setup worth watching even when the indexes keep grinding higher.

Technical Outlook

S&P 500 Index

The S&P 500 Index (SPX) climbed to a new record high at 7401.50 on Friday. Pivot price support moved up accordingly to 7287.81, 7254.68 and 7224.03. These levels are offering protection against a breakdown under the last minor swing bottom at 7174.12. Taking out this level will shift momentum to the downside.

There is no visible resistance at current price levels, but our historical analysis suggests a closing price reversal top and subsequent confirmation will be the first sign of a momentum shift.

Nasdaq Composite Index

A trade through 26248.62 will signal a resumption of the uptrend. Taking out minor bottoms at 24913.12, 24491.13 and 24199.00 will shift momentum to the downside. A main bottom has formed since March 30.

We have no upside targets for the Nasdaq Composite (IXIC), but a closing price reversal top or the formation of an “M” will indicate the presence of sellers.

Dow Jones Industrial Average

The Dow Jones (DJI) trend is also up, but the market is playing catch up with the S&P 500 and Nasdaq Composite. It’s not a sign of weakness, but more of exposure to technology stocks, particularly the semiconductors.

If the Dow starts to outperform the other major indices then consider this to be an early sign that traders are starting to rotate out of technology shares.

A trade through 50130.20 will reaffirm the uptrend with the record high at 50512.79 the next target. A trade under the pivot at 49419.39 will be the first sign of weakness. Taking out the main swing bottom at 48708.57 will change the main trend to down. This will also put the 50-day moving average at 47875.50 on the radar.

More Information in our Economic Calendar.