Markets in focus
Markets look past the war
The S&P 500 (+4.5%) and Nasdaq 100 (+6.2%) surged to fresh all-time highs this week, with the latter recording its longest winning streak since 2013 at 13 consecutive sessions. The rally mirrors the V-shaped recovery seen after Liberation Day last April — markets are pricing in a benign resolution to the Iran conflict despite no agreement in place, much as they looked past elevated tariffs to push indices to record highs last year. Retail participation, which had fallen to unusually low levels during the selloff, snapped back to normal within days according to JPMorgan client flow data, suggesting fear of missing out is drawing investors back in on dips.
However, market breadth has not kept pace — around half of US stocks remain below their 200-day moving average, leaving the advance heavily concentrated in technology names. A broadening of participation would be needed to confirm the breakout.
Q1 bank earnings were largely robust. Citigroup was the standout, reporting its best quarterly revenue in a decade at $24.6 billion with net income surging 42% YoY, making it the best-performing major bank stock of the week. JPMorgan and Goldman Sachs also beat estimates on record trading revenue, while Wells Fargo disappointed on both revenue and net interest income. JPMorgan chief Jamie Dimon cautioned of an increasingly complex risk environment amid geopolitical tensions and elevated asset prices.
Following a 17% rally from the 31 March low, the US Tech 100 is trading with strong momentum. Recent price action resembles Wave 5 of the Elliott Wave, where a 161.8% Fibonacci extension could take the index to 27,507. However, with the relative strength index (RSI) at 74 indicating overbought conditions, a pullback is possible. Immediate support lies near 26,200 at the previous peaks.
Figure 1: US Tech 100 index daily price chart