The S&P 500 closed last week with a solid gain of 0.86%, marking a new all-time high and breaking out of the two-week consolidation range .
Portfolio rebalancing at the end of May and into early June has reduced some volatility according to the models I analyze. On Friday, we saw a bullish bar with higher highs and higher lows, along with a new record closing high.
At Friday’s close, both Japan and the USA led in performance.The “Peace Trade” Has Not Ended YetOn Friday we saw the usual script again:
- U.S.: “We are close to a deal with Iran”
- Iran: “We are not talking”
- U.S.: “Iran wants to reach an agreement”
- Iran: “We reject the agreement”
Oil is already pricing in a possible reopening of the Strait of Hormuz. This is putting downward pressure on interest rates through lower expected inflation and continues to fuel the stock market rally.
AI Remains the Main Engine
You don’t have to look far to see its strength. Dell’s results from last week were a clear example: AI server revenue reached $16.1 billion, surpassing the traditional PC business for the first time. The stock reacted strongly, rising more than $100 in after-hours trading (peaking at +40%).
Next week will bring relevant data to gauge the market’s pulse:
- Employment: JOLTs and ADP early in the week, followed by Nonfarm Payrolls on Friday. A stronger-than-expected labor report could revive the “good news is bad news” narrative, especially with inflation still elevated.
