US Stocks Extend Their Rally, but Oil and Rates Still Send Mixed Signals
US Stocks · Options · News · Views
Short-term momentum remains strong. All four major indexes moved higher again, with both the S&P 500 and Nasdaq gaining more than 1%. Cross-asset signals, however, remain inconsistent. Crude is above 100, equities continue to rally, and rates are not confirming the same macro story. That divergence can persist for a while because markets are still responding more to expectations, headlines, and positioning than to a stable macro regime.
I would not treat this as a low-risk trend that can be chased at any price. The Strait of Hormuz, ceasefire negotiations, and conflicting messages from Iran are still driving sharp moves in oil. If elevated crude and supply risk persist, equities are unlikely to ignore them indefinitely. Bulls remain in control for now, but I would describe the current phase as momentum- and earnings-driven rather than a fully confirmed long-term breakout.
I am watching two risks most closely. First is geopolitics and oil. The US-Iran negotiating timetable continues to shift, while different Iranian factions are sending conflicting signals. Another Hormuz-related escalation could quickly force oil and risk assets to reprice together.
Second is AI CapEx and software valuation. TSLA’s first-quarter free cash flow was temporarily positive, but the forward spending requirement is rising and free cash flow could turn negative again through the rest of 2026. NOW’s results are another reminder that established software companies must prove AI is an incremental growth driver rather than a source of disruption. If AI revenue ramps too slowly or margins are revised lower, software multiples can compress again.
I am focused on MSFT, IGV, NOW, and TSLA. MSFT has cleared 430, materially improving the technical structure. From here, a gradual series of higher lows and higher highs looks more likely than a renewed downtrend. Its beta is not especially high, though, and with earnings next week I would not use a short-dated option to chase a single strong session. IGV is also close to a breakout; I have moved the key level to 89.1. A clean move above it would show that active buyers are beginning to replace short covering.
NOW’s post-market selloff was driven less by the reported quarter than by weaker-than-expected forward margin guidance. The upward revision to AI revenue was not enough to eliminate medium-term disruption concerns. I still view TSLA as a swing-trading setup within the 315–465 range, while longer-duration additions make more sense at lower prices. AMD and AMZN have either made or are approaching new highs, so I would stay with the trend while gradually reducing concentration as AMD approaches 350. GOOG remains pointed toward its prior high after clearing 325, while NVDA’s gradual uptrend remains intact.
My approach is to respect the short-term strength without chasing the most crowded trades. MSFT becomes more attractive on a pullback into 410–421. I would add roughly 4% there rather than wait for a perfect bottoming pattern, since the broader 397–430 area remains meaningful support. If the stock continues higher without a pullback, I would simply keep the existing position.
IGV becomes more attractive only after a confirmed break above 89.1; otherwise I would watch whether the 86–87 area holds. TSLA remains primarily a swing and options trade at current prices, with no long-term additions planned in the 300s; below 200 is closer to a long-duration accumulation area. For AMD and AMZN, I would continue to ride the trend or trim concentration gradually. ISRG remains a watch below 430. Overall, I would keep a constructive bias while treating geopolitics, oil, AI spending, and earnings follow-through as clear triggers for reducing risk.