By Panos Mourdoukoutas

Wall Street’s multi-week rally turned into an “everything rally” this week amid lower oil prices, steady bond yields, robust earnings, and corporate deals that boosted demand for riskier assets.

For the week, the Dow Jones Industrial Average gained 0.22 percent to close at 49,609, below its May 6 peak. The S&P 500 surged by 2.33 percent to close at 7,398, another record high. The Nasdaq Composite led gains for a fifth straight week, soaring by 4.51 percent to an all-time high, while the Russell 2000 rose by a modest 1.72 percent.

The Chicago Board Options Exchange Volatility Index ended the week at 17.19, up by 1.18 percent.

Stocks opened slightly higher on May 4, carrying over positive momentum from the previous week, but quickly turned negative as rising Middle East tensions pushed oil prices and Treasury yields higher.

West Texas Intermediate crude futures soared by more than 3 percent to more than $105 per barrel after headlines emerged of Iranian missiles targeting the United Arab Emirates and Tehran signaling firmer control over the Strait of Hormuz, rattling traders.

The yield on the benchmark 10-year Treasury note climbed to 4.456 percent, its highest level since July 2025, while the 30-year Treasury bond crossed the psychological 5 percent mark.

Adding to upward pressure on yields were the Treasury Department’s quarterly borrowing announcement, several speeches from Federal Reserve officials, and anticipation of the Labor Department’s jobs report.

All major averages closed deeply in the red. The Dow Jones led the decliners, falling by 1.19 percent, followed by the Russell 2000, down by 0.60 percent. The S&P 500 and Nasdaq performed slightly better, losing by 0.41 percent and 0.19 percent, respectively.

Transportation stocks took a particular hit after Amazon announced it is extending its logistics network—covering freight, distribution, fulfillment, and parcel shipping—to businesses of all sizes, posing a direct threat to UPS and FedEx, both of which closed nearly 10 percent lower. Amazon’s shares rose by 1.38 percent.

Interest-rate-sensitive stocks also lost ground. Homebuilder D.R. Horton fell by 4.30 percent, and travel platform Expedia dropped by 2.12 percent.

Bullish sentiment returned on May 5 as oil prices pulled back and bond yields stabilized, with the 10-year Treasury note trading around 4.40 percent and the 30-year hovering just below 5 percent.

Steadier yields fueled a rally in small caps, with the Russell 2000 soaring by 1.75 percent to lead the day’s gains. The Nasdaq, S&P 500, and Dow Jones posted solid advances of 1.03 percent, 0.81 percent, and 0.73 percent, respectively. Semiconductor shares were particularly strong amid a revival of AI enthusiasm following the previous week’s robust earnings results from major tech companies.

“Many investors are trying to read the tea leaves on the next shoe to drop with the Iran war and oil prices, but stocks have historically moved on quickly from geopolitical events, and we believe this current issue is no different,” Julian Koski, chief investment officer of Rye, New York-based New Age Alpha, told The Epoch Times.

Koski cautioned that investors are too focused on picking AI winners in the wake of big tech earnings. “The most important question in AI is whether or not a company will deliver the growth implied by its stock price,” he said.

Stocks gained broad momentum on May 6 amid renewed hopes that a resolution to the Middle East conflict may be near. Oil prices and bond yields retreated, clearing the way for gains across the board. The tech-heavy Nasdaq led the advance, rising by 2.02 percent. The S&P 500, Dow Jones, and Russell 2000 followed with gains of 1.46 percent, 1.24 percent, and 1.47 percent, respectively.

Fueling the rally was a wave of strong corporate earnings. Advanced Micro Devices surged by 18.61 percent, delivering another jolt to the already-hot semiconductor sector. Disney and CVS Health gained 7.54 percent and 7.65 percent, respectively, lifting the media and health care sectors.

The bullish momentum stalled on May 7 as all major averages slid into the red, dragged down by a rollercoaster session in oil prices and bond yields. West Texas Intermediate crude futures, which had posted sharp early losses, rebounded to above $96 per barrel by late morning as confusion persisted over the fate of Middle East peace talks.

The 10-year Treasury yield dropped to 4.32 percent in the morning before climbing back toward 4.40 percent by afternoon.

The Russell 2000 led decliners, falling by 1.61 percent. The Dow, S&P 500, and Nasdaq fared better, losing by 0.63 percent, 0.38 percent, and 0.13 percent, respectively.

The parade of tech earnings delivered mixed results. Chip designer ARM Holdings beat expectations, but the results weren’t enough to satisfy investors, triggering a broader semiconductor sell-off. Meanwhile, cloud security platform Datadog also beat estimates, drawing buyers back to software stocks—its shares jumped by nearly 30 percent.

Investor interest in tech stocks surged on May 8 after reports that Apple and Intel had reached a preliminary agreement to jointly produce chips. Intel’s shares soared by 13.96 percent to another all-time high, while Apple gained 2.05 percent, helping the Nasdaq gain 1.71 percent for the day. The S&P 500 followed with a 0.84 percent gain, the Russell 2000 gained 0.76 percent, and the Dow closed flat.

The week ended on an upbeat note with a stronger-than-expected jobs report. The U.S. economy added 115,000 jobs in April, following an upwardly revised 185,000 in March, well above market forecasts of 62,000.

Higher job growth and declining labor force participation kept the unemployment rate steady at 4.3 percent.

The strong jobs report shows that the labor market is in the early stages of returning to growth after a more than six-month lull—welcome news for both the economy and the stock market.

Chris Kampitsis, managing partner at Barnum Financial Group, said the Federal Reserve is likely to keep interest rates on hold in the near term as inflationary pressures and oil prices remain elevated.

He also believes the market’s rebound off the March lows reflects classic correction behavior—a sharp V-shaped move—and that the right side of that V could continue for some time.

“With a Federal Reserve transition expected in the near-term, that could spike volatility in the markets, as has been the case in the past during past Chair transitions, as investors get used to a new Chair’s messaging, something that isn’t necessarily priced into markets ahead of time,” he added.

Looking ahead, Koski sees Nvidia’s earnings later this month as the next major test for the market.

“The company has a high probability of delivering on the revenue growth implied in its current stock price. Nvidia has delivered breathtaking revenue growth over the past 12 quarters, and there is no evidence that this momentum will slow, since demand for AI is rising, not declining,” he said.