U.S. stocks set new record highs last week against a backdrop of easing tensions in the Middle East and strong earnings. Funds flowed into AI-related stocks, and developments pointing to medium- to long-term gains were reported.
U.S. stocks rose sharply last week, the week of 13 April, with the S&P 500 up 4.54% and the Nasdaq 100 up 6.2%, taking both indexes to record highs. A sharp drop in oil prices and the retreat of the war premium supported the rise in share prices.
As earnings season progressed, results that exceeded previous expectations supported the market. About 10% of S&P 500 companies reported earnings for the January-March quarter, of which 88% beat market expectations. Strength in financial stocks and inflows into AI-related stocks drove the market, while energy stocks weakened relatively because of lower oil prices.
Bullish signals emerged over the medium to long term. As of 15 April, the S&P 500 had risen 10.7% in 11 trading days, and there had been fewer than 20 instances in the past three months of a comparable sharp rally. The average gain over the following six months is said to tend to remain high.
Developments in Iran and corporate earnings will remain the market's focus this week. Iran is expected to continue discussions over the extent of concessions, while about 90 companies are scheduled to report earnings, including Capital One Financial, UnitedHealth Group and Tesla.