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“A man who is certain he is right is almost sure to be wrong.” – Micheal Faraday

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Despite declines in crude oil and Treasury yields, US equity futures are basically unchanged ahead of the opening bell. The 10-year yield is down 3 basis points and below 4.93%, while WTI crude oil falls more than 2% to $93.50 per barrel. Gold prices are fractionally lower while Bitcoin falls less than half a percent to $86K.

In Asia, Japan remains closed for holidays, but other major regional benchmarks were modestly higher. Onshore and offshore Chinese stocks rallied less than 25 basis points, while South Korea was also up a modest 0.1%. Shares of Alibaba (BABA) are up 3% as the company discussed a product roadmap and launched a new AI chip. There was no major economic data on the calendar, but ongoing trade talks between the US and China ahead of this week’s Trump-Xi meeting will likely move markets over the next few days.

European stocks are trading mostly positive this morning. The STOXX 600 is up 0.5%, and the only major benchmark index lower on the session is Italy with a decline of 0.2%. Stocks were weaker in early trading, but reversed early losses and now trade at the highs of the day after reports that Iran has offered to open the Strait of Hormuz within seven days if the US eases military pressure.

Yesterday was another one of those days where breadth wasn’t nearly as strong as the price action. While the S&P 500 was up 1.49%, the Equal Weight version of the index rallied just 0.55%. The S&P 500 also underperformed the Nasdaq, which was up 2.26%, and the Nasdaq 100 was up even more at 2.83%.

While the index performance suggests that yesterday’s rally was primarily driven by mega-caps, even within that smaller cohort, performance was uneven. The chart below shows the performance of all the trillion-dollar market cap stocks yesterday. Of the dozen trillion-dollar stocks, seven outperformed the S&P 500. Against the Nasdaq, though, just four stocks outperformed (META, TSLA, NVDA, and MU). Lastly, against the Nasdaq 100, just two stocks – META and TSLA – outperformed. Looking at the chart, the real driver of yesterday’s gains was Meta Platforms (META), which rallied more than 11%, and without it, yesterday’s performance would have looked much more modest.

Even if yesterday’s rally was mostly driven by META, it was an impressive move at the index level. Heading into the session, you probably weren’t expecting the Nasdaq to close at an all-time high, but big days often come when they’re least expected, so in some ways it shouldn’t be a surprise!

In the Nasdaq’s history, yesterday was the 1,069th day that the index closed at an all-time high, which works out to a little less than 8% of all trading days. Days when the Nasdaq rallies more than 2% are less common, as there have been 575, which works out to about 3.5% of all trading days. What’s even less common, however, is when the Nasdaq rallies 2%+ and closes at an all-time high on the same day. That’s only happened on 37 trading days in the Nasdaq’s history, with the most recent before yesterday occurring on May 6.

The long-term chart of the Nasdaq shows every prior occurrence with a red dot. Interestingly, there wasn’t a single occurrence from 1971 through the 1980s, but the 1990s were littered with occurrences right up through the dot-com peak. There wasn’t another occurrence after that since the Nasdaq went over a decade without hitting a new high, but since 2016, the pace has picked back up again.

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