The NASDAQ Composite (IXIC) sailed to its highest level on record on Thursday, temporarily overcoming the 26,000 handle. While no definitive peace agreement with Iran has emerged, the US stock market continues to trade this week on the hope that one will soon arrive. Not for the first time, the Trump administration has been suggesting they are close to a deal that would reopen the Strait of Hormuz, which has largely remained shuttered since the war began more than two months ago.
The NASDAQ Composite, which is comprised of more than 2,500 stocks, is already up about 3.5% this week alone and looks set to complete its six consecutive week of gains.
NASDAQ rally led by tech, again
Tech stocks are taking the lead once again as the sector rallies over 0.9% on Thursday, while the Communications sector takes second place, up 0.7%. This is simply a continuation trade of what’s been going on since the market decided to forget about the war at the start of April. Since March 30, the broad equity rally has been primarily a product of gains in technology, consumer discretionary and communications segments of the market.
Equities overall have been helped by Oil (WTI) dropping massively on the back of the inchoate peace talks from $106 at the start of the week to $93 realm on Thursday. Of course, peace talks have come and gone before, but this time it’s not just Axios reporting the possibility. Instead, a number of more critical media houses seem to think there’s an opening despite Israel lobbying the Trump administration against signing a deal.
Q1 earnings season continues to play out to the benefit from investors. Datadog (DDOG) rallied over 30% on Thursday after beating consensus and raising its full-year revenue outlook by about 8%.
Fortinet (FTNT) rallied over 22% after similarly raising its guidance and outlook. Analysts said much of the gains were due to the company demonstrating how AI was failing to endanger its cybersecurity product offerings.
Heating and cooling solutions provider AAON (AAON) surged as much as 50% on the back of heavy bookings by the data center sector. Shares of the company gapped up to an all-time high above the previous record set in November 2024.
NASDAQ chart
The NASDAQ has been gaining for six straight weeks at this point. This price action has pushed the Relative Strength Index (RSI) finally into overbought territory, but momentum doesn’t seem like it wants to quit. This sort of rally requires a major news event to pop its psychology.
The bias remains upward for now, but bears will expect a pullback at some point to the previous all-time high from last October near 24,000. However, the medium-term support of the rising 26-week Simple Moving Average (SMA) near 23,200 tells us that 24,000 could soon harden into long-term support if another correction doesn’t soon emerge.
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