The stock market rally is back in full force. The S&P 500 and Dow Jones reached new record highs last week as investors responded to lower oil prices, reduced Treasury yields, and strong earnings reports. The Nasdaq composite also saw a significant move, jumping 5.2% and clearing the 50-day line. This shift suggests the market has moved out of its recent choppy phase.
Investors are now looking ahead to a busy week of corporate reports. Berkshire Hathaway releases earnings on Saturday, which will provide insight into the company's cash holdings and buyback activity. Other key reports include Cisco Systems, Lumentum Holdings, Applied Materials, Coherent, and Nebius. Market participants will monitor these AI hardware stocks closely as they approach key technical levels.
Sector performance was broad last week. Software, metals, and biotechs led the gains, while aerospace and retail stocks also performed well. The Invesco S&P 500 Equal Weight ETF hit a new record, reflecting broader participation beyond just the largest tech names. While the market trend is positive, it remains prudent to add exposure incrementally rather than all at once.
Avoid buying former leaders that remain stuck below their 50-day moving averages. Instead, focus on stocks and sectors showing current strength and technical breakouts. Keep a close eye on the upcoming CPI inflation report on Wednesday and PPI data on Thursday, as these economic indicators could influence interest rate expectations and market sentiment.