Wall Street Brief (May 9): US stocks continued to rise on Friday, with further divergence among indices as technology stocks regained dominance in risk appetite; the Nasdaq led gains driven by the semiconductor supply chain, crude oil continued to fall, and the dollar weakened.

Summary: US stocks continued to rise on Friday, with the S&P 500 up 0.84%, Nasdaq up 1.71%, Dow Jones up 0.02%, and Russell 2000 up 0.76%. From the index performance, the Dow was almost flat, while technology and growth sectors remained the true drivers of the market. The VIX rose to 17.19, up 0.64% for the day, indicating that while risk appetite has improved, institutional protective positions have not been fully removed. The most important pricing factors of the day were: first, the loosening constraints brought by the continued decline in crude oil and the retreat of the dollar index; second, stronger-than-expected employment data stabilized growth expectations, prompting funds to return to the technology sector. In terms of market performance, XLK led the gains, with high-elasticity subsectors such as chips, robotics, copper mining, and clean energy showing synchronized activity; internally, Tesla and Apple drove the movement among the seven major tech stocks. In broader asset classes, gold rose 0.65%, and Bitcoin rose 0.44%.

I. Major Events

1. Expectations around US-Iran negotiations continue to weigh on oil prices.

The market continues to trade on expectations that US-Iran negotiations may lead to a recovery in supply, with crude oil falling 3.05% on Friday. Energy constraints that had previously weighed on risk assets have significantly eased, and the dollar index also retreated by 0.43%, reopening upward space for growth assets. The market reaction was straightforward: the Nasdaq significantly outperformed, while the Dow barely kept up, with capital prioritizing a return to sectors with higher valuation elasticity and greater sensitivity to interest rates and liquidity.

2. Stronger-than-expected employment data keeps soft landing expectations in favor.

US April employment data exceeded economists' expectations, showing resilience in the labor market. For the market, this means concerns about 'a significant slowdown in growth' did not intensify, providing firmer fundamental support for risk assets on Friday. Looking at the market dynamics of the day, the drop in oil prices alleviated cost and inflation constraints, while the employment data stabilized growth expectations, both supporting the continued rise of the S&P and Nasdaq.

II. Major Trends

The technology sector has once again widened its gap with other styles. Over a two-week period, QQQ rose by 7.13%, significantly higher than SPY's 3.32% and DIA's 0.62%. Over a three-month horizon, QQQ gained 16.81%, while DIA fell by 0.60%. Nasdaq's rise of 1.71% on Friday further reinforced the current market structure where 'the index can rise mainly due to continued leadership from the tech sector.'

The breadth issue did not disappear due to Friday’s rally. Over a three-month period, SPY rose by 7.10%, while RSP increased only by 1.34%; over two weeks, SPY climbed by 3.32%, and RSP by just 1.02%. While the weighted indices continue to rise, equal-weighted indices are still weak, indicating that the foundation of this rally remains narrow.

Growth style remains significantly stronger than value. Over three months, SPYG rose by 12.15%, much higher than SPYV’s 1.47%. It is also worth noting that MAGS gained 10.32% over three months, surpassing XMAG’s 4.22%, showing that leading tech and growth stocks still dominate. Though XMAG has shown short-term improvement, the main upward trend currently focuses on top-tier assets.

III. Market Sentiment

The VIX closed at 17.19, up 0.64% in a single day. The index rose, but volatility did not fall correspondingly, suggesting that although the market is accepting higher-risk positions again, it remains cautious about macro and geopolitical tail risks. The CNN Fear & Greed Index rose to 67 from a previous value of 66, continuing to stay in the greed zone. Market sentiment improved slightly compared to the previous day but hasn't quickly moved toward overheating; the market is still in a phase of 'willing to keep going long but not fully removing protection.'

The options structure is also sending a similar signal. The total Put/Call ratio returned to 0.76, with equity options at just 0.62, indicating a clear recovery in risk appetite at the individual stock level. However, the index options Put/Call ratio remains at 1.03, showing that institutional-level index protection has not completely loosened. Considering VIX, the CNN Fear & Greed Index, and Put/Call together, the current market sentiment leans warm but retains defensive positioning rather than indiscriminately chasing gains.

IV. Market Scan

1. Index ETFs:QQQ rose by 2.34%, significantly outperforming DIA’s 0.04%. Although broad-based indices closed higher overall, the real driver of the market remains the tech-heavy weights, as traditional industrials and defensive sectors have not kept pace. This suggests the rally is more about 'tech regaining dominance' rather than broad-based expansion.

2. Industry sectors:In sector performance, XLK rose by 3.44%, reclaiming the top spot, while XLU fell by 0.89%, continuing to lag. As oil prices and the dollar retreated, funds reopened their risk budgets, first returning to tech rather than defensive sectors like utilities. In sub-sectors, SMH surged by 4.90%, COPX and BOTZ both climbed by 4.07%, TAN rose by 3.65%, and CIBR gained 2.98%, showing that capital isn’t just flowing back into large-cap tech stocks but also spreading through chips, automation, commodities, and clean energy chains. On the other hand, IHI fell by 1.98% and URA dropped by 1.92%, indicating that not all high-volatility themes are receiving incremental funding.

3. Seven major tech companies:Within the seven major tech stocks, there was no uniform movement. Tesla led with a 4.02% gain, Apple rose by 2.05%, while Microsoft fell by 1.34%. This indicates that Friday’s tech strength was not driven by all core weights collectively, but rather by certain high-elasticity and less crowded trades playing a larger role.

4. Chinese concept stocks:Chinese stocks overall have not truly caught up with this round of risk recovery. Baidu rose by 0.84%, relatively the strongest, while Pinduoduo fell by 2.69%, clearly lagging behind. Funds remain cautious towards Chinese stocks, with the expansion of the tech-driven rally primarily occurring within the US domestic growth chain and not spilling over to Chinese internet stocks.

5. Cryptocurrencies:Bitcoin rose by 0.44%, MSTR climbed by 4.31%, CRCL increased by 0.37%, and RIOT fell by 0.12%. The crypto chain did not show a uniform surge but rather localized activity around Bitcoin-related plays and select high-elasticity targets. The core of capital expansion remains in the tech-driven narrative, not in crypto assets themselves.

$S&P 500 Index (.SPX.US)$ $SPDR S&P 500 ETF (SPY.US)$ $NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $Bitcoin (BTC.CC)$ $Ethereum (ETH.CC)$ $SPDR Gold ETF (GLD.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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