Market Recap
The market entered the week with a bullish backdrop following the recent breakout in $QQQ to all-time highs. Both $SPY and the Nasdaq Composite also reached fresh all-time highs early in the week, before pulling back.
Breadth remained an important concern, with the rally still heavily concentrated in technology and AI-related names. Small caps and other rate-sensitive sectors continued to struggle to show the same relative strength, leaving the broader market less constructive than the headline indices suggested.
Thursday saw a sharp selloff across AI infrastructure and semiconductor stocks following a Financial Times report suggesting that OpenAI’s annualized revenue was running below previously indicated expectations.
However, the report was later challenged as misleading, as the discrepancy between the $50 billion and $70 billion figures largely came down to differences in how revenue from cloud partnerships was accounted for, rather than an actual slowdown in OpenAI’s growth. The clarification helped ease some of the selling pressure heading into Friday.
Treasury yields also moved lower towards the end of the week, providing some relief to rate-sensitive areas of the market.
Watchlist
The market heads into another important week, with CPI inflation data on Wednesday, followed by PPI and retail sales on Thursday. Earnings season is also getting underway, with major banks reporting alongside several important semiconductor names, including $TSM and $ASML. These catalysts could help determine whether the recent breakout in the indices can develop into a more sustained move higher.
$MRNA has shown notable strength recently, with several large-range days to the upside. If the momentum continues, it could start to become extended and potentially offer an extended reversal setup.
Software stocks have been showing improving relative strength, with $PLTR trading at all-time highs and $SNOW making a fresh breakout. Both remain worth watching if they have continued momentum.
$DELL is also approaching new highs, showing relative strength within the broader AI hardware space.
$GME has been rallying towards new yearly highs, gaining around 50% from its lows a couple of months ago. Momentum has been building steadily, making it another name to keep on watch.
$CBRS is approaching its IPO lows, an important area to monitor for either a potential breakdown or a reaction off support.
Telecom stocks $TMUS, $T and $VZ saw sharp selling on Friday following news involving $SPCX. These will be worth watching if further selling continues into the new week.
$ASTS also broke to fresh 52-week lows following the same news, making it a potential downside continuation watch.
Closing Thoughts
Despite the pullback towards the end of the week, the broader market remains in a cautiously bullish regime, with $QQQ and $SPY still trading near all-time highs.
The main concern continues to be weak market breadth, with much of the strength concentrated in a relatively small number of technology and AI-related stocks. However, there are some encouraging signs of momentum broadening into other areas, particularly software.
With earnings season getting underway and several important economic catalysts ahead, there is plenty of potential for volatility and new opportunities to emerge. For now, the focus remains on stocks showing relative strength and clean technical setups, while staying selective until broader market participation improves.
If you enjoyed this read, please consider leaving a like on the post, and let me know in the comments if I missed anything or what you’re watching for this week!
P.S.
If you haven’t checked out the Valhalla Portal yet, it’s where I track catalysts, setups, and market activity in real time - a live feed of everything that moves the tape, built for the community. I’ll be doing a dedicated post soon walking through all the features in detail, so stay tuned for that. In the meantime, you can check it out here: