The Market Brief
U.S. equity futures cautiously higher on early Tuesday as chip stocks extended gains for a second consecutive session, with easing Middle East tensions providing an additional tailwind to sentiment.
Macro Viewpoint
Iran and Israel confirmed a halt to hostilities Monday following an appeal from President Trump, returning to the tenuous ceasefire established on April 8.
Oil fell more than 2%, erasing most of the prior session’s gains, though caution persists as diplomatic efforts have yet to produce a durable agreement and the Strait of Hormuz remains closed.
Technology and AI stocks came under sharp selling pressure last week after Broadcom’s disappointing forward guidance stoked concerns over stretched valuations across the sector, particularly among chipmakers that have staged strong gains this year.
Prime Intelligence
Yesterday’s attempt at continuation was shut down as the breadth of stocks carrying the index higher was, once again, very narrow. The rejection occurred right at our flip zone shared with subscribers overnight on our daily trading plan. (get access with a subscription).
Despite the market finishing higher, 63% of SPX constituents actually finished lower, continuing to highlight the problem that sustained rallies require broader participation.
Breadth remains narrow, though not nearly as narrow as during the Dot-Com Bubble. While the recent momentum rally has been extremely sharp, unlike prior episodes the majority of gains have been driven by positive earnings revisions.
The Market Brief
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