S&P 500 Hits Record High as Tech Surge Masks Broader Market Weakness

The stock market delivered another tech-driven rally, with mega-cap leadership pushing the S&P 500 (+0.8%) to fresh all-time highs, both intraday (7,026.24) and at the close (7,022.95). The Nasdaq Composite (+1.6%) outperformed with a record close of its own, underscoring continued momentum in growth stocks.

In contrast, broader market participation lagged. The Dow Jones Industrial Average (-0.2%) slipped modestly, highlighting a narrow advance concentrated in technology and other growth-oriented segments.

Markets continue to find support from an improving geopolitical backdrop. Reports suggest the U.S. and Iran may soon resume negotiations aimed at extending the current ceasefire. Meanwhile, stability in energy markets has helped anchor sentiment, with crude oil futures finishing essentially unchanged at $91.30 per barrel.

Leadership once again came from the information technology sector (+2.1%), which has now gained 5.6% week-to-date. Software stocks were the primary drivers, with Microsoft leading the “Magnificent Seven” higher. High-growth names such as Datadog and ServiceNow posted outsized gains, while the iShares GS Software ETF surged 4.4%.

Semiconductors lagged relative to software, though still managed to stay marginally positive. The PHLX Semiconductor Index edged higher by 0.1%, with weakness in names like Sandisk and ASML offsetting strength in Broadcom, which rallied following an expanded AI infrastructure partnership with Meta Platforms.

That partnership also helped lift the communication services sector (+1.1%), while the consumer discretionary sector (+1.4%) advanced on strong performance from Tesla, which posted one of the session’s largest gains.

Mega-cap dominance remained a defining feature of today’s session. The Vanguard Mega Cap Growth ETF rose 1.9%, driving a clear divergence between the market-weighted S&P 500 and the flat performance of the equal-weighted index.

Outside of tech, the financials sector (+0.8%) was the only other group to post gains. Morgan Stanley advanced following a strong earnings report, while Robinhood Markets surged after regulatory approval of a proposal from FINRA to eliminate existing day trading margin requirements.

The broader market, however, showed signs of strain. The industrials sector (-1.2%) lagged, with Caterpillar and Carrier Global under pressure amid concerns that higher-for-longer interest rates could weigh on capital-intensive industries.

Other cyclical and defensive sectors also trailed, including the materials sector (-1.3%), utilities sector (-0.9%), health care sector (-0.7%), and consumer staples sector (-0.4%), reflecting a clear rotation away from defensives and into growth.

Among smaller-cap benchmarks, the Russell 2000 (+0.3%) posted a modest gain, while the S&P MidCap 400 (-0.3%) edged lower.

Today’s session marks a significant technical milestone, with the S&P 500 surpassing its prior record high from late January. Mega-cap and technology stocks have firmly reasserted leadership, reversing earlier-year underperformance tied to geopolitical volatility.

While the longer-term impact of elevated oil prices on inflation and monetary policy remains an open question, the market is regaining its footing. With Q1 earnings season gaining momentum, investors will be watching closely to see whether fundamentals can sustain the current breakout and extend the rally further.

Our FTinvest 11 model portfolio edged down 0.03% to close at 993.03, posting a nearly flat session after several days of steady gains. The portfolio remains just below the 1,000 level, continuing to consolidate while staying within range of its all-time high of 1,039.51.

Based on the start-of-year level of 928.18, FTinvest 11 is now up approximately +6.99% year-to-date, maintaining strong performance despite minor day-to-day fluctuations. The portfolio’s stability underscores the strength of its disciplined, value-driven approach as it continues to navigate the evolving market environment.