Weekly Market Overview
The stock market performed strongly this week. The S&P 500 rose by 4.6%, exiting correction territory, and increased by 10.9% from its April 8 low of 4,982.77. The Nasdaq Composite saw a 6.7% jump, while the Dow Jones Industrial Average gained 2.5%.
Market Dynamics
- Early in the week, stocks fell due to concerns over President Trump’s potential removal of Fed Chair Powell, raising worries about the Fed’s independence.
- China warned of retaliation against countries limiting trade due to U.S. pressures, adding to trade tensions.
- Later, President Trump assured no intention of firing Powell and signaled a softer stance in trade negotiations with China, boosting market sentiment.
Sector Performance
- Mega cap stocks significantly contributed to the overall market performance, with the Vanguard Mega Cap Growth ETF (MGK, Financial) increasing by 7.4%.
- The technology sector rose by 7.9%, consumer discretionary surged by 7.4%, and communication services increased by 6.4%.
Earnings Highlights
- Tesla (TSLA, Financial) surged 18.1% despite a weak Q1 earnings report, as Elon Musk announced a reduction in his DOGE work.
- Alphabet (GOOG, Financial) saw a 6.8% rise after reporting its earnings.
Treasury Market Support
The Treasury market provided additional support to equities, with the 10-year yield decreasing by six basis points to 4.27% and the 2-year yield dropping by four basis points to 3.76%.
Guru Stock Picks
Richard Pzena has made the following transactions:
Today’s News
Alphabet (GOOG, Financial)(GOOGL, Financial) significantly bolstered the technology sector with its shares rising nearly 2% following a report of double-digit revenue growth, driven by its services and cloud businesses. This performance contributed to a positive sentiment in the tech sector, highlighting Alphabet’s resilience amid competitive pressures and strategic investments in AI and infrastructure.
In contrast, Summit Therapeutics (SMMT, Financial) faced a steep decline, with shares dropping about 35% after a trading halt. This followed the FDA’s approval of its partner Akeso’s first internally developed medicine, which did not meet market expectations. The selloff marked the largest one-day decline for Summit in over three years, despite the promising trial results of its PD-1/VEGF bispecific antibody.
Roundhill Investments introduced a new financial product, the Roundhill Magnificent Seven Covered Call ETF (MAGY), targeting mega-cap tech stocks like Alphabet, Apple (AAPL, Financial), and Nvidia (NVDA, Financial). This ETF seeks to offer enhanced income through a covered call strategy, appealing to investors looking for exposure to leading tech companies without directly managing options.
Nvidia (NVDA, Financial) received a boost from Morgan Stanley, which raised its 2026 estimates for the company, citing increased demand for GPUs amid a shortage in inference chips. This comes as Nvidia continues to navigate macroeconomic challenges and supply chain risks, with a focus on the burgeoning AI market.
Unity Software (U, Financial) maintained its upward trajectory, closing higher for eight consecutive sessions. The stock’s recent rally is attributed to optimism surrounding its upcoming Vector ad platforms, which are expected to capture a significant share of the mobile gaming advertising market.
SLB (SLB, Financial) experienced a downturn after missing Q1 earnings estimates and issuing a cautionary outlook due to economic slowdowns and tariff policies affecting demand for its oil drilling equipment. This follows similar warnings from peers Halliburton and Baker Hughes about weaker demand and increased costs.
In the biotech sector, Merck (MRK, Financial) saw slight gains as Summit Therapeutics announced interim data from a trial of its lung cancer therapy developed with Akeso. The data showed promising results compared to Merck’s Keytruda, although Summit’s shares fell sharply following the announcement.
IonQ (IONQ) announced plans to establish a $22M quantum computing hub in Chattanooga, Tennessee, marking a significant step in expanding its quantum computing capabilities. This facility will be the first of its kind in the U.S., aiming to accelerate the development of quantum technology applications.