Mega-Cap Momentum Carries Markets to Fresh Highs at Start of May

The S&P 500 and Nasdaq Composite opened the new month on a strong footing, extending their record-setting run as mega-cap and technology stocks once again provided the bulk of the upside. In contrast, the Dow Jones Industrial Average lagged, weighed down by broader market softness.

Market breadth was notably narrow, with only two sectors finishing in positive territory. However, a strong advance in the information technology sector (+2.5%) proved sufficient to lift the major indices.

Apple led the charge, rallying after delivering a solid earnings beat and issuing upbeat guidance, reinforcing confidence in mega-cap tech leadership. Microsoft also rebounded, recouping part of its prior session’s post-earnings decline.

Software names added to the momentum. Atlassian surged following a standout earnings report, helping push the iShares Expanded Tech-Software Sector ETF sharply higher.

Semiconductors contributed modestly, with the PHLX Semiconductor Index advancing 0.9%. SanDisk and Seagate Technology posted strong gains on earnings momentum, while Western Digital faced some profit-taking after recent strength.

The consumer discretionary sector (+0.5%) was the only other gainer, supported by continued strength in Tesla and Amazon. Their performance, alongside gains in large-cap tech, lifted the Vanguard Mega Cap Growth ETF, further emphasizing the market’s reliance on a concentrated group of leaders.

Meanwhile, easing oil prices influenced sector rotation. Crude settled lower, pressuring the energy sector (-1.3%), which finished as the weakest performer. The industrials sector (-0.9%) also lagged after the prior session’s strong rally, although airline stocks such as United Airlines and Southwest Airlines benefited from lower fuel costs and traded higher.

Losses across the remaining sectors were relatively modest, reflecting a subdued close to what had been a record-setting week for equities.

Overall, the session reinforced a familiar theme: strong earnings-driven momentum in mega-cap and technology stocks continues to dominate index performance. As May begins, the market remains firmly supported by this leadership, even as participation beneath the surface remains limited.

Our FTinvest 11 model portfolio declined 0.47% to close at 1,017.73, giving back a portion of the previous session’s strong gains. The portfolio remains above the 1,000 level, continuing its consolidation phase while staying below the all-time high of 1,039.51.

Based on the start-of-year level of 928.18, FTinvest 11 is now up approximately +9.65% year-to-date, maintaining solid performance despite today’s pullback. The portfolio’s disciplined, value-driven strategy continues to provide resilience as it navigates short-term fluctuations heading into May.