Wall Street Daily (April 18): US major indexes continued to hit new highs on Friday, with the market fully rebounding from 'energy panic'; tech stocks/small caps led the way, repairing key sectors + expanding outward, Bitcoin surged

Summary: US equities continued to rebound on Friday, with the S&P 500 up 1.20%, Nasdaq up 1.52%, Dow Jones up 1.79%, and Russell 2000 up 2.11%. The S&P 500 continued to set a new closing high, with small caps clearly leading the day. In terms of intraday structure, the market is gradually transitioning from 'repairing key sectors first' to 'expanding outward.' The VIX fell to 17.48, down 2.56% from the previous day, indicating sentiment remains warm but still has room before overheating. The core trade for the day was as follows: after the reopening of the Strait of Hormuz, oil prices quickly retreated, and risk appetite shifted from 'energy panic' back to 'full recovery.' On the trading board, consumer discretionary, industrials, and technology sectors generally strengthened, while the energy sector saw noticeable pullbacks. In terms of major asset classes, the US Dollar Index rose by 0.02%, gold rose by 0.89%, crude oil plummeted by 6.30%, and Bitcoin gained 3.25%.

I. Major Events

1. Reopening of the Strait of Hormuz

Iran announced the reopening of the Strait of Hormuz to commercial oil tankers, marking the most important event of the day with the most direct impact on asset pricing. Previously, the market worried that crude oil transportation could be disrupted again, potentially driving energy prices higher and pushing inflation and growth expectations in a more unfavorable direction. The reopening of the strait essentially pulled back the most sensitive pricing link, causing oil prices to retreat while risk assets experienced recovery.

2. Taiwan Semiconductor continues to validate AI demand

Taiwan Semiconductor reported a significant increase in profits for the first quarter, raised its revenue guidance for the second quarter, and reiterated that AI demand remains strong. Its significance goes beyond just a single company's impressive performance; it also provides fundamental confirmation of the market’s core growth narrative early in earnings season. This reinforces the strength of the technology sector as being well-supported.

3. Netflix earnings report reminds the market that high expectations still require stronger delivery

Although Netflix delivered Q1 results stronger than expected, its forward guidance did not continue to raise the bar. Coupled with Reed Hastings' announcement to step down from the board, the stock plummeted instead. This also serves as a reminder to the market: even though overall sentiment is leaning positive, the bar for earnings reports has not been lowered. The index may strengthen, but individual stock performance still hinges on 'delivery strength.'

II. Major Trends

On the same day, IWM rose 2.16%, outperforming QQQ's 1.31%, SPY's 1.21%, and DIA's 1.77%. This indicates that this round of risk recovery is no longer driven solely by a few mega-cap stocks. Small caps and a broader range of assets are starting to pick up the slack. Looking at intraday structure alone, the market is gradually transitioning from 'first repairing the leaders' to 'expanding outward,' which is more noteworthy than the simple index hitting new highs.

However, over a longer timeframe, technology and growth stocks remain the primary drivers of elasticity. Over a two-week period, QQQ surged 10.92%, significantly higher than DIA's 6.27%; SPYG climbed 11.94%, also notably stronger than SPYV's 4.32%. In other words, while the market is broadening participation, growth stocks are still leading the way, with no systemic rotation into value stocks observed yet.

The breadth recovery has not yet fully caught up with the performance of large-cap stocks. Over a two-week span, SPY gained 8.28%, while RSP rose 5.22%; MAGS jumped 14.04%, whereas XMAG increased 6.04%. A more accurate description is not 'the end of抱团 (herd mentality),' but rather 'the herd remains strong, while diffusion is beginning to appear.' Market structure is improving, but core pricing power still largely rests in the hands of leading growth assets.

III. Market Sentiment

Market sentiment continues to warm up, but it has not reached uncontrollable optimism. The VIX fell to 17.48, down 2.56% from the previous day, reflecting a further decline in defensive demand; the CNN Fear & Greed Index rose to 68, continuing its upward trend from the previous day's 63, indicating risk appetite returning to a moderately positive zone. At the options level, the Cboe total Put/Call ratio stood at 0.67 before the close, with the index options Put/Call ratio at 0.86 and equity options Put/Call ratio at 0.53—hedging demand has not re-emerged. Overall, the market is willing to maintain risk exposure, but remains fundamentally cautious about geopolitical volatility.

IV. Market Scan

1. Index ETFs

Major index ETFs strengthened across the board, with IWM rising 2.16%, making it the most elastic direction of the day; DIA climbed 1.77%, QQQ rose 1.31%, and SPY gained 1.21%. This indicates that the day's rally was not solely reliant on Nasdaq heavyweights 'pulling hard'; small caps and traditional blue chips rebounded in tandem, showing noticeably better participation compared to previous rounds of more one-sided rallies.

2. Sector Performance

At the sector level, discretionary consumption rose 2.36%, industrials climbed 1.87%, technology gained 1.53%, real estate increased 1.53%, healthcare advanced 1.49%, and staples rose 1.26%, presenting a typical pattern of risk recovery. By contrast, energy fell 2.76%, becoming the weakest sector of the day, largely corresponding to the concentrated unwinding of prior geopolitical premiums following a sharp drop in oil prices. The market did not shift toward new defensive lines but instead corrected the previous expectation that 'energy shocks would continue to weigh on risk assets.'

3. Seven tech giants

Within the Magnificent Seven tech stocks, there was uneven performance, but the main theme remained strong. Tesla rose 3.01%, and Apple gained 2.59%, placing them at the forefront of the group. After risk appetite improved, capital still favored high-elasticity leaders. However, Netflix plummeted 9.72%, becoming the weakest performer. The structure is clear: tech stocks can still be bullish, but only if their narratives and earnings reports pass scrutiny. 'Decent performance' alone is no longer sufficient to support higher valuations.

4. Chinese Equities

Chinese ADRs performed decently overall but were inconsistent. Alibaba rose 1.75%, while Tencent Music fell 0.69%, reflecting passive recovery amid a global improvement in risk appetite rather than being driven by a new unified catalyst. From the perspective of the day's trading dynamics, this direction still leans towards 'follow-up recovery' and is unlikely to rise to become an independent main theme for now.

5. Cryptocurrencies

The resilience in the cryptocurrency sector is significantly stronger than the broader market itself. Bitcoin rose 3.25%, MSTR surged 11.80%, while CRCL fell 1.44%. When risk appetite recovers, capital tends to chase high-beta, highly leveraged crypto exposures rather than lifting all related assets simultaneously. In other words, this trend also reflects a 'stronger focus on key areas but with stricter internal screening' characteristic.

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