16%. That's how much the S&P 500 has climbed over the past two months as futures ticked up on Sunday night. S&P 500 futures rose 0.3%, Nasdaq-100 futures gained about 0.5% and Dow futures were up roughly 75 points as Wall Street looked to extend a multweek rally into June. Oil also climbed late on Sunday, with West Texas Intermediate advancing nearly 3% after a steep slide in May, a move that leaves consumers and energy intensive businesses watching costs closely.
Equities have surged to fresh records even as oil swung violently, a contrast that's reshaping market narratives. The S&P 500 and Nasdaq closed at new highs on Friday, and the S&P ended May with a 5.2% gain while the Dow rose 2.8% for the month, MarketWatch reported. The market strength has been concentrated in large cap technology names, driving the Nasdaq to an 8.4% advance in May and underpinning a nine week winning streak for the S&P 500, MarketWatch added.
Tech gains and earnings momentum
That technology led rally has allowed broad indices to absorb headline risks that might otherwise weigh on stocks. The Los Angeles Times cited FactSet research showing that more than four out of five S&P 500 companies that have reported so far have topped profit expectations, leaving reported corporate earnings on track for strong year on year growth. The result is an equities market that, for now, looks through near term energy shocks because it's pricing in stronger future earnings.
Traders and strategists have flagged the divergence. Stephen Innes, managing partner at SPI Asset Management, wrote that "the oil market remains focused on physical risk, while the stock market focuses on future earnings," adding that equities appear to be pricing a diplomatic resolution that energy markets still doubt. That assessment helps explain why stocks are advancing even as oil remains volatile.
Still, not everyone is insulated. Households and energy intensive businesses are the most directly exposed to swings in oil prices, and volatile fuel costs are a persistent drag even when headline indices rise. The Los Angeles Times noted that index level returns have risen while many companies and consumers still feel the impact of higher and more variable fuel bills.
Oil traders reacted to several geopolitical developments tied to the conflict with Iran and to comments from US officials. MarketWatch said West Texas Intermediate rose nearly 3% late on Sunday after a month in which the US benchmark fell about 17%, citing FactSet. FactSet data showed WTI had closed on Friday at $87.36 a barrel and that Brent had settled at $92.50 after a month in which both benchmarks posted their largest declines since early 2020.
MarketWatch also cited reporting that negotiations to end the Iran war remained stalled and that President Donald Trump had hardened his terms for a potential agreement. The piece said Mr Trump reiterated those views in a weekend interview when he said, "Slowly but surely we're getting, I think, what we want, and if we don't get what we want we're going to end it a different way." Associated Press reporting referenced in the same coverage said the US Navy struck a merchant ship attempting to avoid a blockade of Iranian ports.
Those developments feed the physical risk the oil market is pricing. Traders see a route by which supply could be disrupted or rerouted, and that raises near term premiums even as financial markets switch their focus to growth and profits.
Other markets moved as well over the weekend. Bitcoin traded around $74,000, roughly 5% lower over the prior week, and Asian markets took cues from the US tech rally, with chip stocks lifting indexes in the region, MarketWatch and the Wall Street Journal reported. The combination of higher tech earnings and selective risk appetite in Asia has helped sustain the rotation into semiconductors and software stocks.
For now, the market story is twofold. First, large cap technology strength is lifting headline returns and underpinning investor confidence.
Second, energy markets retain a separate logic tied to physical supply and geopolitics, leaving a persistent vulnerability beneath the surface rally. The gap between those two readings helps explain why traders are willing to celebrate fresh records in equities even while paying closer attention to oil movements.
Volume and tone in futures trading were relatively thin on Sunday, reflecting the celebratory, catch up feel of markets that have already rallied for weeks. That means short term moves can exaggerate the impression of momentum in either direction, particularly in commodities where geopolitical headlines trigger rapid repositioning.
Investors and corporate treasurers will be watching which narrative wins out in the coming days: continued earnings momentum that lifts markets or renewed energy market stress that filters through to costs and margins.
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The Wall Street Journal listed corporate results due this week from Palantir, Walt Disney, Advanced Micro Devices and Kraft Heinz, and said the April jobs report is due on Friday. Originally reported by Morningstar.com.
This article was created with AI assistance.
