May 8, 2026

The S&P 500 and NASDAQ extended their weekly win streak to six powered by a +11.1% surge in the Philadelphia Semiconductor Index (SOX) which has soared +67% from its March 30, 2026 closing low. The DJIA traded higher for a fifth time in the last six weeks getting a boost from gains in Boeing (BA) and Apple (AAPL), the latter reaching a new record high. The different indexes took a step back from their record highs to start the week as the US and Iran briefly clashed, but investors bought the dip as the fragile cease-fire held and the S&P 500, NASDAQ, NASDAQ 100 and Russell 2000 notched new all-time highs on Tuesday following a dip in oil prices. The rally was led by a +4.23% rebound in semiconductors with shares of Intel (INTC) spiking +12.95%, while memory chips, including Micron (MU) and SanDisk (SNDK) also jumped more than +10% after doubling forward guidance. Blowout earnings from Advanced Micro Devices (AMD) and reports that the US and Iran were close to reopening the Strait of Hormuz, triggered another jump in equities mid-week as oil prices fell -7.09% and kept the rally rolling as global markets traded sharply higher. Lower oil prices eased inflation concerns and yields eased lower with the rate on the 10-year Treasury ending the period at 4.363% and the two-year T-Bill landing at 3.897%. Market participants took a breather on Thursday on mixed earnings from McDonald's (MCD) and a disappointing report from Whirlpool (WHR) as they waited on a response from Iran on a peace proposal from the US to end the Iran conflict. A better-than-expected BLS Employment Report on Friday showed a resilient labor market with the Unemployment Rate remaining at 4.3%. The different indexes jumped at the open and another surge in the semiconductor index, jumping another +5.51%, sparked new highs in the S&P 500, NASDAQ 100 and S&P 500 ahead of the weekend. Most sectors participated in the weekly gains but Technology (XLK), up +8.43%, was the star of the show. Consumer Discretionary (XLY), Materials (XLB) and Industrial (XLI) also outperformed. The slide in oil left the Energy (XLE) sector down -5.35% with Utilities (XLU), Financial (XLF) and Healthcare (XLV) also trading down. The six-week win streak in the S&P 500 and NASDAQ is their longest since October 2024. Next week is light on key economic data, but earnings will continue to be the driver for equities as investors keep a wary on headlines out of Middle East on hopes of an ending resolution to the US/Iran war and the opening of the Strait of Hormuz.

For the period, the DJIA added 109.89 points (+0.2%) and settled at 49609.16. The S&P 500 tacked on 168.81 points (+2.3%) and closed at 7398.93. The NASDAQ jumped 1132.64 points (+4.5%) finishing at 26,247.08. The small cap Russell 2000 picked up 48.39 points (+1.7%) and settled at 2861.21.

Market Outlook: The technical condition of the market remains positive, but sections of the market are overbought by several measures and there remain concerns that the gains are being led by a narrowing group of stocks. Like the previous week, new highs were recorded by the S&P 500, NASDAQ, NASDAQ 100, Russell 2000 and Philadelphia Semiconductor Index. The different indexes continue to trade above key MA levels confirming their bullish uptrend. However, the S&P 500 closed the week trading more than +9% above its 200-day MA confirming an overbought condition and the most since mid-January. The technical indicators for the major averages are positive but there was little movement in the Dow Jones. The S&P 500 and NASDAQ show the MACD, a short-term trend gauge, moving higher and Momentum, as measured by the 14-day RSI, strong but in the mid-to high 70's which is overbought. The NASDAQ's 14-day RSI is the highest it's been in almost two years. The VIX has continued to trend lower since mid-April indicating that traders believe the worst is behind us and there remains more upside.  There are signs however, that the market could be getting near a top. The parabolic move in the Philadelphia Semiconductor Index (SOX) chart looks like it could be setting up for a Ôblow off' top and that type of rally rarely ends well for investors as momentum traders pile more money at tops chasing winners. The surge seems to be backed by strong earnings and forward guidance, but the move has properties of the dot.com era and we know how that ended. As mentioned last week, only the Technology (XLK) and REITs (XLRE) sectors have been able to break out to new highs which continues to point to a narrow group of stocks leading the different indexes higher. In this case, semiconductors, AI-related and big cap tech stocks. Most of the other sectors are churning in a sideways pattern, but Consumer Staples (XLP) has been drifting higher the last few weeks, a defensive market group, while Consumer Discretionary (XLY) has been nudging higher on strength in Tesla (TSLA). The Financial (XLF) and Healthcare (XLV) sectors are both trading below their respective 200-day MA, a bearish sign, and Energy (XLE) finished the period down -11% from its March high. The Utilities (XLU) selloff found support on Friday at its 100-day MA. Finally, while we could see equites take a fresh leg higher if we see a conclusion to the Middle East conflicts, the Market Edge Cyclical Trend Index (CTI) is projected to revert to a negative setting next week. That is due to the influence of longer cycles prevalent in the market and could be another sign that the major averages could be close to topping out over the next few weeks.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Positive at +2, unchanged from the previous week. Cycles B and C are bullish, while Cycles A, D and E are bearish. The positive CTI configuration is projected to move to a negative reading next week.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Bullish at +6, up two notches from the previous week. Breadth was positive at the NYSE as the Advance/Decline line gained 574 units while the number of new 52-week highs exceeded the number of new lows on each session. Breadth was also positive at the NASDAQ as the A/D line added 1746 units while the number of new highs out did the new lows on all four days. Finally, the percentage of stocks above their 50-day moving average increased to 66.6% vs. 66.3% the previous week, while those above their 200-day moving average rose to 60.0% vs. 59.3% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was positive with the NYSE Advance/Decline Line, a leading indicator of market direction, hitting a new high on Wednesday. The NYSE A/D Line hasn't made much headway since mid-April, leaning to a narrow group of stocks leading the markets current leg up. New 52-week highs continue to outpace the new lows and there was expansion in the new highs on the NASDAQ, a plus, while remaining little changed on the NYSE.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Negative at -3, unchanged from the previous week.

Investor sentiment is neutral to bullish, but there was little change in the numbers. The American Association of Individual Investors (AAII) saw retail bulls remain above their historical of 37.5%, inching up to 38.3% from 38.1% the prior week. The National Association of Active Investment Managers (NAAIM) Exposure Index shows money managers are Ôall in' rising to 96.7% from 93.8% previously. That's also the most exposure to equities this group has had since mid-January.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bullish as of the week ending 04/10/2026 (DJIA - 47916.57). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Group Rankings: What's Hot (9) - What's Not (21): The following are the strongest and weakest Industry Groups for the period ending 5/07/26. Strongest: Technology Hardware, Conglomerates, Telecommunications and Agricultural. Weakest: Paper & Forest Products, Building Materials, Infrastructure and Metals & Mining. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 5/07/26 were: Specialty Technology (+6.95%), Commodity-Precious Metals (+3.09%), Growth-Large Cap (+2.49%), Sector-Internet (+2.32%) and International-Emerging (+2.09%). The weakest categories were: Sector-Energy (-6.71%), Commodity-Energy (-5.95%), Commodity-Blend (-2.40%), Specialty Utilities (-2.09%) and Specialty Retail (-1.59%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT