The bulls sent a powerful message last week, continuing the advance that began late the prior week. The move higher in U.S. equities was accompanied by a new high in market breadth, weakness in a key defensive theme, and confirmation from both overseas markets and high-yield credit.
S&P 500 and NASDAQ 100
Both the S&P 500 and NASDAQ 100 produced powerful candles last week. The opening print on Monday was the low of the week, and the closing print on Friday was near the high of the week. Both reacted exactly as we would have expected following the strong reversal the prior week.
The S&P 500 is at new highs. The NASDAQ 100 is close. Both are above rising 60-week moving averages. With all of that in mind, it is difficult to justify a bearish stance.
Source: Optuma
S&P 500 Equal Weight Index and NYSE Advance/Decline Line
The S&P 500 is at all-time highs, but so is the equal-weight version of the index. That is a sign that strength is broad. This is not simply a rebound in the Mag Seven.
To drive that point home, look at the NYSE Advance/Decline Line, which has also moved to record highs.
Source: Optuma
Consumer Staples
The companies that make up the Consumer Staples sector sell products that people need. Regardless of economic conditions, people are likely to continue buying products such as soap and toothpaste. That is why Staples are viewed as defensive.
The chart has been a mess all year.
The relative trend has been declining since March 2025 and is now approaching a new low.
Source: Optuma
International Stocks
This is not just a party in the United States. The iShares MSCI ACWI ex U.S. Index Fund (ACWX) posted a new weekly closing high last week. The 40-week moving average continues to rise steadily.
The relative trend remains stable.
Source: Optuma
High Yield Corporate Bonds
Finally, the iShares iBoxx High Yield Corporate Bond ETF (HYG) traded to new highs last week, both on an absolute basis and relative to aggregate bonds.
That remains a strong signal that investors are comfortable taking risk.
Source: Optuma
Asset markets can be summed up in one line: Broad-based price strength with broad participation across markets and geographies. In a word…Powerful!
