In the past week, we have experienced a weak unemployment report, a dispute between Trump and Musk, a renewed conflict between Ukraine and Russia, and continued uncertainty about tariffs between China and the United States, but the market has maintained a bullish momentum in the past week. What we can see is that the market is continuing to break out of the consolidation process that has been going on since the beginning of the year.
The current market momentum is still in the overbought range, and it is not surprising to see further consolidation before setting new highs. Given that the MACD has issued a sell signal and the continued weakening of capital flows, the possibility of another retest of the 200-day moving average in the next week is also increasing.
Source：Futu NiuNiu
In the past week, the overall performance of the US stock market has been stable and continued its recent upward trend. The S&P 500 ETF (SPY) rose slightly by about 0.36%, continuing to approach its historical high; the Dow Jones Industrial Average ETF (DIA) also rose modestly, and the Nasdaq ETF (QQQ) rose even more modestly. Since the beginning of the year, the S&P has risen by about 2.4%, the Nasdaq by 1.6%, and the Dow by 1%; last week, they rose by 1.5%, 2.2%, and 1.2%, respectively, and the market has shown a stable trend.
The core driving force behind the market's rise is the optimistic macro environment. Investors' hopes for the resumption of trade negotiations between China and the United States are growing, especially in the steel and technology sectors, which have surged in the market, and the S&P 500 has therefore broken through 6,000 points. At the same time, the May CPI data showed mild inflation, and the S&P rebounded and pushed market sentiment further positive. The bond market saw a decline in yields, and the US stock and US bonds "re-correlated" trend.
However, volatility risks still exist. Small and medium-cap stocks, such as the Russell 2000, have been mild this week, and there was a brief correction in the middle of the week due to negative news. The market is still highly sensitive to after-hours earnings reports and changes in the trade process. In addition, although the 10-year Treasury auction was strong, the US dollar failed to rebound, and the market's response to global policy differences in the short term is more complicated.
At the corporate level, stock repurchases hit a record high, and S&P 500 companies announced a total of US$750 billion in repurchase plans, which to a certain extent provided financial support to the market. In addition, among micro stocks, chip manufacturers such as Micron continue to receive funding boosts; the aviation sector has seen significant adjustments in related stocks due to the Air India plane accident, becoming a short-term slot for changes in market sentiment.
In terms of individual stocks, Oracle (ORCL) is one of the most eye-catching large-cap stocks this week. Its share price soared by about 13% after the earnings report was released, as its cloud infrastructure services performed strongly, making the market excited about its earnings recovery expectations.
Similarly, Boeing (BA) was hit hard by the air crash in India, and its share price fell by nearly 5% at one point, reflecting the market's sensitivity to the risks exposed by aviation safety and its supply chain.
The semiconductor sector continues to be the "invisible engine" driving the market up. Applied Materials, KLA, TSMC and other related stocks have all been sought after by funds, driving the chip industry in the Nasdaq to continue to lead the market.
Palantir has slightly pulled back after hitting a record high this week. Its pullback is not large, indicating that institutions remain optimistic about its long-term AI/big data deployment prospects.
In addition, Tesla rebounded by about 4.6% in the adjustment of the technology sector. Although it had a pullback at the beginning of the week due to the founder's public statement, the overall performance remained stable.
Due to the outstanding performance of the financial reports, companies such as Oracle and Palantir have successively announced quarterly results that exceeded market expectations, which directly boosted investor confidence and became the key bull catalyst for the US stock market this week. This kind of rise supported by fundamental improvements has also strengthened the market's recognition of the medium- and long-term growth logic of technology stocks.
At the same time, some short-term fluctuations are more from the impact of unexpected events. Boeing has attracted market attention due to the major air crash in India, and the aviation sector as a whole has encountered selling pressure.
From a larger market level, the market is undergoing a round of adjustments in technology and cyclical sectors. As expectations for improvement in the macro environment heat up, funds have begun to switch between sectors. The semiconductor sector has strengthened again, and chip stocks have led the rise to become one of the highlights of this week, while large-cap technology stocks have continued to be favored under the support of risk aversion demand and policy expectations. These positive factors have maintained the overall upward momentum of the market and made the market hotspots more dispersed, which is conducive to improving trading activity and investment flexibility in the short term.
Next week, the Fed's June meeting, news on China-US negotiations, and US labor data (including initial jobless claims and non-farm payrolls) will become the focus of the market. If the Fed maintains a prudent stance and hints at a path for rate cuts this year, it may further boost the market; on the contrary, if the combination of a weaker dollar and an unfavorable monkey market occurs at the same time, it may lead to a technical correction.
