S&P500 and Nasdaq: Nvidia, Micron Lead as AI Trade Shrugs Off Oil Spike

S&P 500 and Nasdaq Hit New Records as AI Trade Ignores the Oil Spike

The S&P 500 climbed 0.35% to a new all-time high Monday. The Nasdaq Composite gained 0.24% and touched its own intraday record. The Dow added 0.24%. June WTI crude oil jumped more than 2% back above $100 a barrel after Trump called the ceasefire “on life support” and rejected Iran’s latest proposal. The stock market looked at all of that and bought technology anyway. That tells you everything about where trader psychology is right now.

Technical Outlook

In the cash market, the benchmark S&P 500 Index is touching new highs shortly after the mid-session. Without any clear resistance to aim for, all traders can do at current levels is monitor the upside momentum and look for signs of weakness like a closing price reversal top, the formation of frequent minor and main tops and the violation of pivots and swing bottoms.

After today’s higher-high, a lower close will produce a closing price reversal top. If confirmed, this could trigger the start of a two-to-three-day correction.

Any break in the pattern would be indicative of selling pressure. For example, since late March the index hasn’t posted two consecutive lower-lows, which means traders are not waiting passively with bids, they are aggressively taking out offers. A change in this pattern could be a sign that some major players are selling rallies. Until then, the trend is your friend.

Nearby support pivots that track potential price swings come in at 7300.73, 7267.60 and 7236.95 today.

The nearest minor swing bottoms are 7174.12, 7107.86 and 7046.55.

The AI Trade Is Running the Show

Micron Technology surged 7.66% Monday. Nvidia gained about 3%. Those two moves tell the story of this entire session. Chipmakers tied to artificial intelligence demand are not waiting for geopolitical clarity before they run.

The Strait of Hormuz is restricted, oil is above $100 and the Nasdaq is at a record high. I’ve watched markets ignore macro risks before but this is one of the more decisive examples I’ve seen. The buyers in semiconductor and AI names are not nervous. They are aggressive and they have been aggressive for six straight weeks.

Oil Above $100 and Stocks Don’t Care

Trump described the ceasefire as being “on life support” Monday and called Iran’s response totally unacceptable. June WTI crude oil responded immediately and pushed above $100. Under normal conditions a 2% move in energy markets on a geopolitical escalation headline creates real pressure on equities through the inflation channel. Monday it created a 0.35% gain on the S&P 500.

The energy sector caught a bid from the oil move. Technology kept running on its own momentum. The two stories are operating independently right now and the market is rewarding both of them at the same time.

Earnings Expectations Keep Moving Higher

The fundamental argument underneath this rally is not complicated. Earnings estimates keep going up instead of down and the market is pricing that in. 83% of S&P 500 companies that have reported first quarter results beat expectations against a long-term average of 67%.

Now one of Wall Street’s longtime strategists raised his year-end S&P 500 target to 8,250 from 7,700. That implies another double-digit gain from current levels. The confidence behind that kind of revision comes from one place. AI infrastructure spending is driving revenue and profit growth at the companies that matter most to the index and nothing in the current environment is slowing that down.

Biotech Got Attention for the Wrong Reasons

Reports of a hantavirus outbreak tied to a cruise ship briefly moved vaccine-related names. Moderna traded higher early after confirming preclinical research on hantaviruses. Most of those gains faded by midday as health officials described the public risk as low and analysts downplayed any commercial impact. I’ve seen this pattern in biotech before. A headline creates a quick move, traders chase it and then the fundamentals reassert themselves within hours. Nothing about Monday’s hantavirus trade changed the bigger picture for the sector.

What to Watch

The closing price is the number that matters today. A lower close after a new intraday high produces a closing price reversal top on the S&P 500. If confirmed it triggers the first two-to-three-day correction since late March. Watch the pivot at 7300.73 on any pullback. The minor swing bottoms at 7174.12, 7107.86 and 7046.55 are the deeper support levels if the selling picks up.

Six straight winning weeks with no two consecutive lower-lows is a powerful pattern. The first time that pattern breaks it deserves attention. Until it breaks the trend is the only trade worth making.

More Information in our Economic Calendar.