Bulls are pushing the S&P 500 back near records. What drove the market last week
Stock market bulls rallied last week after a brief lull, sending the S & P 500 back to the peak of another record high. The index has now advanced for eight consecutive weeks since the Iran war ended on March 30, its longest winning streak since late 2023, when it strung together nine in a row. With Friday’s small gains, the S&P 500 is now less than 0.4% below its May 14 record close of 7,501. It was a sharp turnaround from earlier in the week, when the good times seemed to be in jeopardy due to old foes high oil prices and bond yields. Oil again traded above $100 a barrel, and the 30-year Treasury yield on Tuesday reached its highest level since 2007. Stocks didn’t like that. The S&P 500 ended Tuesday riding a three-time skid since May 15, with losses not seen since March 26, 27, and 30. As in the early days of the Iran war, stocks took their cues again from the oil and bond markets. The enthusiasm about artificial intelligence has not been enough to go public. .SPX 3M mountain S & P 500 3 Months The market turned a corner on Wednesday. Oil prices and bond yields fell, leading to a positive session for the S & P 500. It started the rise of the stock market – like the meeting on March 31. Investors were optimistic after President Donald Trump said that the US is in the “final stages” of peace talks with Iran. The S&P 500 did not stop there and continued to advance through Thursday and Friday. It wasn’t just hopes of a verdict that fueled last week’s action. Nvidia, the AI trading hub, reported a strong quarter on Wednesday night — but not strong enough to lift its stock higher. Also on Wednesday, SpaceX filed for its initial public offering, which is expected to be the largest in history. The spectacular comeback in cybersecurity stocks, including the club name CrowdStrike, has continued. Overall, the S & P 500 jumped 0.9% over the five-day period. The tech-heavy Nasdaq and the Dow Jones Industrial Average rose 0.5% and 2.1%, respectively. The blue-chip Dow ended the week at a record high. Here’s a closer look at the teams that drove this team last week. Nvidia’s quarter Nvidia posted another blockbuster quarter late Wednesday. The company presented estimates above analyst forecasts, and CEO Jensen Huang said “demand is gone.” We recently reinforced our view that Nvidia is the name to own during the AI race, and raised our price target to $260 per share from $230. Still, the stock fell 2.6% in the next session and another 0.5% on Friday. It’s a disappointing reaction, given the shares are incredibly cheap compared to peers, and have plenty of room for further growth. The stock’s subsequent decline in profits isn’t all that surprising — it’s become a pattern in recent quarters, no matter how good the numbers look. At least shares of the Arm group name jumped on the release. Nvidia highlighted strong demand for Arm-based Vera CPUs (central processing units). CFO Colette Kress said Nvidia is looking at nearly $20 billion in CPU revenue this year. This is good news for Arm because the company receives royalty payments. Armored shares jumped more than 16% on the earnings led by Nvidia, and gained 46% for the week. It was our best player. But the stock has been in the works for a while — up nearly 81% since taking the position in April. A parabolic move is why we sold some on Monday and will likely short again next week, as Director of Portfolio Analysis Jeff Marks wrote in Friday’s Homestretch. Goldman’s earnings for Nvidia’s trifecta weren’t the only driver of Club stock’s weekly gains. SpaceX filed for its initial public offering (IPO) on Wednesday, sending shares of Goldman Sachs higher as the company took a bigger stake in the deal. Goldman was listed as the most desirable “left-hand lead” position in the SpaceX vision. By leading some of the most valuable parts of the original stock, the investment bank will likely take home the largest share of the fees. It should be very profitable for Goldman as SpaceX is expected to be the largest IPO in history. The offering of Elon Musk’s rocket company, valued at $1.25 trillion, could raise $75 billion or more. That would be more than three times the size of the largest US offering to date: Alibaba’s $25 billion IPO in 2014. The banks in Alibaba’s IPO were paid more than $300 million in underwriting commissions during that time. That’s about 1.2% of the e-commerce giant’s net worth. Using the same calculations for SpaceX, participating banks could bring in more than $900 million. “This is a huge win for Goldman Sachs and ensures that this Investing Club stock is in good shape for all the majors,” Jim said. OpenAI may be one of those “big ones” as well. CNBC reported Wednesday that Goldman and Morgan Stanley are working on a public AI startup. It’s another monster deal as OpenAI recently announced a record raising of $122 billion for a post-money valuation of $852 billion. Goldman could also take on rival Anthropic as Claude’s creator weighs plans to go public. Currently, Anthropic is in talks with investors to raise about $900 billion. Overall, more deals for Goldman mean more revenue for its key investment banking division — the main reason it’s in the stock. It was good to see investors recognizing the value of Goldman’s trading line last week as the stock continued to hit record highs. The bank’s stock gained about 5% for the week. The Return of CrowdStrike It was another amazing week for CrowdStrike. Shares rose nearly 12% over a five-day period as Wall Street analysts issued calls and the market continued to come around to our view that cybersecurity names are not threatened by the adoption of AI and should not be lumped in with general-purpose business software stocks. At least seven Wall Street firms raised their price targets on CrowdStrike last week. Some of the more notable ones include KeyBanc, which has reached $700 from $525. While more of a hold call, the revised PT still represents a nearly 6% upside from Friday’s close of $663. Analysts expressed an optimistic view on the need for security. Cantor Fitzgerald raised it to $700 from $550 a few days later, citing “strong” first quarter paychecks and improved earnings. Stifel, Morgan Stanley, Truist, TD Cowen, and Barclays also raised their targets. The Club did the same on Monday, and raised our CrowdStrike price to $650 from $500. We took peer Palo Alto Networks to $255 from $200 again. Now that both stocks have passed those levels, we’ll have to reassess. That’s probably the call we’ll make after earnings in June. CrowdStrike stock has been on a six-week high. Last week, it gained 11.7%; last week, it increased by about 12.6%; and the week before that, it was up about 16%. Big improvements like this are why we decided twice as of Monday, and downgraded CrowdStrike to an even 2 rating. It is not because our convictions have changed. Instead, it is an opportunity to use a parabolic movement that may not be sustainable in the long run. We are cautious because CrowdStrike has had so much flexibility in 2026. AI disruption concerns previously plagued the entire cybersecurity and software industry in February and March. But since the creation of Anthropic’s Project Glasswing, the cyber narrative has changed. The market sees what we always have: new forms of AI will accelerate demand because the risk of new cyber attacks has never been greater. (See here for a full list of stocks from Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stock in his charity portfolio. 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