- The US stock market hit new historical records across the board on Tuesday. The S&P 500 Index (SPX) rose by 0.13% to close above 7600 points for the first time, at 7609.78 points. The Dow Jones Industrial Average (DJI) and the Nasdaq Composite Index (IXIC) closed at 51307.79 points and 27093.90 points, respectively. Despite the indices reaching new highs, there is a divergence in the market's internal structure, as the number of declining stocks has exceeded advancing ones for the past six trading days, raising concerns on Wall Street about excessive market concentration.
- The technology and semiconductor sectors performed strongly. Marvell Technology (MRVL:US) surged by 19% after Nvidia (NVDA:US) CEO Jensen Huang affirmed the importance of its connectivity technology, leading the Philadelphia Semiconductor Index (SOX) to jump by 4%. Hewlett Packard Enterprise (HPE:US) saw its stock rise by 32% due to better-than-expected second-quarter earnings and an upward revision of its full-year guidance. In contrast, Alphabet (GOOGL:US) recorded a nearly 4% drop as it plans to raise $80 billion for artificial intelligence development.
- Macroeconomic and cryptocurrency market volatility intensified. US April JOLTS job openings unexpectedly rose to 7.6 million, the highest in nearly two years. The cryptocurrency sector experienced a deep correction as MicroStrategy (MSTR:US) sold Bitcoin for the first time since 2022, causing Bitcoin (BTC) to fall below the $70,000 mark, with $594 million in long positions liquidated within 24 hours. Meanwhile, regulatory approval of Bitcoin perpetual futures led to significant declines in the stock prices of traditional exchanges like CME (US).
Record High Indices and Significant Market Breadth Divergence
Driven by the AI boom and expectations of corporate earnings growth, the three major US stock indices continued their strong performance. However, analysts point out a clear market breadth paradox behind the S&P 500's record highs, as for the first time since 1996, there have been six consecutive trading days where the number of declining stocks exceeded advancing ones. Currently, the information technology sector and the top ten components account for nearly 40% of the S&P 500 Index's weight. Only the technology and energy sectors have risen over the past five trading days, and if the momentum of major weighted stocks reverses, the current highly concentrated market structure could amplify downward pressure on the index.
Divergence in Tech Stocks and Resonance in the Semiconductor Supply Chain
There is a divergence within the technology sector. Alphabet announced plans to raise $80 billion through stock sales to support its AI infrastructure, including a $10 billion investment from Berkshire Hathaway (BRK.A:US), causing its stock to fall nearly 4% due to dilution effects. Meanwhile, the computing infrastructure chain performed well. Nvidia emphasized the core value of connectivity in distributed computing, driving Marvell Technology's stock up by 19%. Additionally, Hewlett Packard Enterprise's optimistic quarterly outlook and upward revision of its full-year performance guidance led to a 32% surge in its stock, confirming the ongoing pull of AI demand on the hardware supply chain.
Resilience in the Labor Market and Complex Geopolitical Interactions
US April JOLTS job openings reached 7.6 million, significantly exceeding the market expectation of 6.8 million, marking the highest level since May 2024, indicating strong labor demand. If core inflation data also rebounds in the future, the market's pricing of the Federal Reserve's rate cut path may face reevaluation. In the energy market, crude oil prices reversed their decline and continued to rise due to the latest developments in US-Iran relations. Despite previous rumors about the closure of the Strait of Hormuz, US President Trump later stated that negotiations with Iran are progressing rapidly, adding complexity to the energy market's volatility.
New Derivatives Impact Traditional Exchanges and Cryptocurrency Correction
With regulatory approval of Bitcoin perpetual futures, investors are concerned that this new trading product poses a substantial threat to the monopoly of traditional Wall Street exchanges. CME's stock price has fallen by about 9% over the past two trading days, while the Chicago Board Options Exchange has dropped 16% this week, and the parent companies of the New York Stock Exchange and Nasdaq have also come under significant pressure. Meanwhile, the cryptocurrency spot market has also declined sharply, with Bitcoin falling nearly 6% to $67,281.56. MicroStrategy disclosed its first sale of a small amount of Bitcoin since 2022, triggering a chain liquidation of long positions, with $594 million in forced liquidations recorded on crypto exchanges in the past 24 hours.
