S&P 500 extends winning streak to 9 weeks as Dell surges 33%

The S&P 500 rose 0.2% to 7,580.06 on Friday, its seventh straight gain and ninth consecutive winning week — the longest such streak since 2023.

"The rally has been largely tech-led and supported by resilient earnings, but the key question is whether it can be sustained," said Angelo Kourkafas, senior global strategist at Edward Jones.

The Dow Jones Industrial Average added 0.7% to 51,032.46, while the Nasdaq composite gained 0.2% to 26,972.62 — both also closing at records. Dell Technologies surged 32.8%, the biggest gain in the S&P 500, after reporting profits that exceeded expectations and raising its outlook on AI computing demand. Microsoft rose 5.4% and Broadcom added 4.7%, while Costco Wholesale fell 3.9% and Amazon.com dropped 1.2%.

The rally has been narrow. Technology stocks within the S&P 500 rose more than 15% in May, while most other sectors lost ground. With the S&P 500 up 10.7% year to date and companies reporting 28% profit growth in the most recent quarter, the question is whether earnings can continue to outrun the headwinds of rising inflation and elevated oil prices.

Tech Drives the Rally, But Breadth Remains Thin

The S&P 500 has climbed 78% over the past three calendar years, driven largely by expectations that artificial intelligence will represent the next major technology cycle. The index's eight-week winning streak through May 22 produced a 17.3% gain — the biggest such run since June 1997, according to Ryan Detrick, chief market strategist at Carson Investment Research. In the 52 weeks following that 1997 streak, the S&P 500 went on to gain more than 22%.

The Magnificent Seven technology companies and the broader S&P 500 reported their highest earnings growth rates since 2021, at more than 63% and 17%, respectively, according to John Butters, earnings analyst at FactSet. Tech giants are expected to spend nearly $700 billion on AI infrastructure this year alone.

The 10-year Treasury yield slipped to 4.44% from 4.45%, while the VIX held near recent lows, reflecting subdued demand for portfolio protection.

Crypto Diverges as ETF Demand Cools

While equities pushed higher, major cryptocurrencies drifted lower. Bitcoin, ether, XRP and dogecoin all declined as demand for spot exchange-traded funds cooled, according to CoinDesk. Hyperliquid's HYPE token was the only major crypto name to rally, highlighting the rotation out of digital assets and into equities.

The divergence between stocks and crypto may reflect a shift in institutional preference. Cooling ETF demand suggests reduced near-term interest in crypto exposure, even as equity markets absorb record inflows.

Oil Eases on Ceasefire Hopes

Brent crude fell 1.7% to settle at $91.12 a barrel, while West Texas Intermediate crude dropped 1.7% to $87.36, as the U.S. and Iran worked toward extending a ceasefire. Oil remains well above the $70 level in late February before the war began, and prices at the pump continue to feed inflation. A measure of inflation preferred by the Federal Reserve accelerated in April to its highest level in three years.

The Fed has held its benchmark interest rate steady and is expected to maintain that stance at its June meeting, according to CME's FedWatch tool. Cutting rates could lower borrowing costs and boost the economy, but it risks worsening inflation at a time when prices are already elevated.

This article is for informational purposes only and does not constitute investment advice.