Stocks were up early to open the new week after posting wins during the last four trading sessions through Friday. Investors, traders and speculators took the opportunity to sell into a rally that took on historic proportions – and may still take prices higher from here.
With markets poised for a big week for both earnings and economic data as well as more presidential posts about tariffs and trade, a generally cautious as opposed to a broadly manic Monday is its own kind of relief.
The Technology Select Sector SPDR Fund (XLK) was up more than 8% last week – a notable achievement for what had been the worst-performing sector group in the U.S. stock market so far in 2025. XLK was the No. 1 laggard on Monday, though, giving back 0.2%.
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“This week’s theme may be ‘follow-through,” writes Chris Larkin, managing director of trading and investing at Morgan Stanley’s E*TRADE. “The S&P 500 is coming off its third-biggest up week since November 2023.”
He asserts that “follow through on that rally” depends on “White House follow through on last week’s dovish pivot” in its position on China and tariffs.
Larkin notes that high-profile economic data and earnings releases are likely to generate volatility this week. “But as we saw last week,” he adds, “big price swings are easier to digest when they’re to the upside.”
The Cboe Volatility Index (VIX) ticked up to 25.05 from 24.84 on Friday. The U.S. Dollar Index (DXY) softened to 98.92 from 99.47, while the yield on the 10-year U.S. Treasury note declined to 4.212% from 4.266%.
At the closing bell, the blue-chip Dow Jones Industrial Average had risen 0.3% to 40,227, the broad-based S&P 500 was up 0.1% at 5,528, and the tech-heavy Nasdaq Composite had fallen 0.1% to 17,366.
Who is Martin Zweig?
In addition to the dramatic reversal for tech stocks, multiple other technical signals triggered last week, including one of the most auspicious indicators known to investors, traders and speculators.
“Are the lows in?” ponders Ryan Detrick of Carson Group. “At this point, I’d have to say yes, as what we’ve just seen isn’t consistent with a bear market.”
Detrick explains that the Zweig Breadth Thrust Indicator – which measures how quickly market sentiment shifts – activated last Thursday. “The bottom line for readers,” Detrick writes, “is this happens when stocks go from very oversold to very overbought in a quick fashion.”
A ZBT trigger is rare, as Detrick explains. And when it “thrusts” from below 40% to above 61.5% in a 10-day period, it triggers a powerful signal.
“The previous 19 times it had happened,” Detrick notes, a history that goes back to World War II, “that had a year of data after the signal showed higher prices every single time.”
The indicator is named for Martin Zweig, an investor and analyst. The calculation includes dividing the 10-day moving average of the number of advancing stocks by the total number of stocks.
Detrick provides further technical validation for upside from this bottom, noting that the S&P 500 gained more than 1.5% three days in a row and that stocks were higher a year later every time this has happened in the past, “10 for 10.”
More than 70% of the stocks on the New York Stock Exchange (NYSE) were up during those three days, “another rare and potentially bullish clue” after which stocks were higher a year later 26 out of 27 times.
Detrick also has an important codicil: “But we also live in a world where tweets and news drive volatility. Still, I found the recent action extremely encouraging that better times could be coming.”
Earnings
The earnings calendar is getting serious: According to FactSet, 180 S&P 500 companies – a number that also includes 11 of the 30 Dow Jones stocks – are scheduled to report results for the first quarter this week.
Observes FactSet analyst John Butters, of the 258 companies in the index that have issued earnings per share (EPS) guidance for the current year, “151 have issued negative EPS guidance and 107 have issued positive EPS guidance.”
As Butters notes, “The percentage of companies issuing negative EPS guidance is 59%.”
Incoming EPS numbers continue to point to stable ground-level operations for publicly traded American companies. Though the blended net profit margin for the S&P 500 of 12.4% is below the previous quarter’s net profit margin, it’s above the year-ago figure and above the five-year average of 11.7%.
“In fact,” Butters adds, “this quarter marks the fourth consecutive quarter that the S&P 500 is reporting a net profit margin above 12%.” That hasn’t happened since the third quarter of 2021 through the second quarter of 2022.
Economics
It was a quiet day on the economic calendar. But Tuesday through Friday will provide plenty of information for investors, traders and speculators to digest ahead of the next Fed meeting.
The Bureau of Labor Statistics is scheduled to release its Job Openings and Labor Turnover Survey (JOLTS) data for March on Tuesday at 10 am Eastern Daylight Time.
On Wednesday at 8:30 am EDT, the Bureau of Economic Analysis will release Personal Consumption Expenditures Price Index (PCE) data for March. The PCE is the Fed’s preferred measure of inflation. The BEA will also report first-quarter GDP growth data on Wednesday morning.
Weekly jobless claims and Institute for Supply Management Purchasing Managers Index data will come on Thursday. It all leads up to Jobs Friday, when the BLS updates the employment situation as of April.
