Relentless S&P 500 Rally Poised for Sixth Month as Amazon Blowout Lifts Futures

S&P 500 rally momentum is set to extend into a sixth straight month after Amazon’s blowout quarter electrified premarket trading and revived risk appetite across megacap tech.

Futures on the U.S. benchmark advanced after Amazon surged about 13% premarket—adding roughly $300 billion in market value—thanks to the fastest cloud growth in nearly three years. Apple also gained on a revenue beat and an upbeat holiday outlook, while Nasdaq 100 futures rose 1.2% as investors rotated back into Big Tech following a brief pause in the global uptrend.

The tone across markets brightened despite lingering concerns over concentration risk, rich valuations, and the durability of AI-driven capex. With Treasury yields steady and the dollar little changed, risk sentiment improved enough to put the S&P on track for its longest monthly winning streak since August 2021.

What’s moving markets right now

• Amazon shares jumped about 13% premarket on accelerating cloud growth, adding an estimated $300 billion to market cap.
• Apple advanced after a revenue beat and optimistic holiday guidance.
• Nasdaq 100 futures climbed 1.2%, while S&P 500 futures rose 0.6% as of early New York trading.
• Nvidia unveiled new partnerships with major South Korean firms, extending its AI infrastructure push.
• Europe’s Stoxx 600 fell for a fourth straight day; Asia’s benchmark pared monthly gains.
• U.S. Treasuries, the dollar, and oil were little changed; gold eased.

“Volatility has become a feature rather than a bug—day-to-day swings now regularly move major stocks by hundreds of billions of dollars,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “The feedback loop of investor sentiment, speculative positioning, and rapid news-driven reactions amplify these moves.”

S&P 500 rally drivers: Amazon, Apple and AI momentum

This leg of the S&P 500 rally is being powered by familiar engines. Amazon’s cloud reacceleration soothed nerves after recent debates about AI monetization pacing, while Apple’s results and guidance eased fears of a softer holiday season. Nvidia’s progress on global AI partnerships further reinforced the theme that capital spending on compute, networking, and software remains durable.

The rebound is notable because it followed a shaky prior session that rekindled questions about concentration and valuation. All members of the so-called Magnificent Seven caught a bid, highlighting how a handful of names continue to drive the tape. For now, growth resilience in cloud and AI appears to be outweighing concerns about higher-for-longer rates and macro cross-currents.

Concentration risk remains in focus

The S&P 500 rally has leaned on a shrinking group of megacaps, intensifying scrutiny of earnings durability and capital allocation. With lofty multiples back in the spotlight, investors are watching whether AI-related demand filters beyond hyperscalers and chip leaders into software, services, and industrials tied to digital infrastructure. The more the gains broaden, the healthier the advance.

S&P 500 rally versus global markets

While U.S. futures firmed, European equities extended a losing streak, and Asian indices cooled. That divergence underscores the U.S. market’s relative strength, where robust corporate execution and AI leadership are cushioning global uncertainty.

• Stoxx Europe 600: -0.5% on track for a fourth consecutive daily decline
• MSCI World: little changed
• Currencies: Dollar steady; euro around $1.1569; British pound at $1.3135; yen near 154.15 per dollar
• Bonds: 10-year U.S. Treasury yield ~4.10%; Germany 10-year ~2.65%; U.K. 10-year ~4.43%
• Commodities: WTI crude ~ $60.26/bbl; spot gold ~ $4,011/oz
• Crypto: Bitcoin +2.2% to ~109,905;Ether+2.4109,905;Ether+2.43,849

The S&P 500 rally continues to outshine many peers, though day-to-day leadership within the U.S. remains narrow. That split is a reminder that macro stability, earnings breadth, and cross-asset flows still matter.

Earnings breadth and fund flows are doing the heavy lifting

Earnings season has surprised to the upside. Roughly 80% of reporting S&P 500 companies have topped forecasts, a key support under the S&P 500 rally. Inflows reinforce the move: global equities attracted about $17.2 billion in the week to Oct. 29, according to EPFR data cited by Bank of America. Strategists led by Michael Hartnett noted that AI leadership remains intact.

“The risks are mainly flows. They have been the main driver, much more than EPS growth,” said Karen Georges, equity fund manager at Ecofi. “If flows begin to halt on risky assets, then there will be a genuine selloff. But it’s like a black swan, you never know when it’s coming.”

Flows can be fickle and headline-driven. For bulls, steady inflows and better-than-feared earnings keep the S&P 500 rally on track. For skeptics, narrow leadership and lofty multiples raise the bar for positive surprises.

Policy and geopolitics: a calmer tape, but risks linger

On trade, Treasury Secretary Scott Bessent said he expects the U.S. to return to negotiations with China within a year, following an agreement between President Donald Trump and President Xi Jinping to extend a tariff truce, roll back certain export controls, and ease other barriers. Xi warned against “breaking supply chains” in comments after meeting with Trump.

“A comprehensive deal still looks far away and while trade tensions have eased for the time being, they have the potential to resurface,” said Mohit Kumar, chief economist and strategist at Jefferies International.

For the S&P 500 rally, the policy backdrop is a swing factor. Easing trade frictions support risk assets; any reversal would challenge multiples and margins, particularly for global supply-chain leaders.

Corporate highlights shaping sentiment

A cluster of corporate headlines added fuel to Friday’s session and informed sector moves:

• Exxon Mobil: Topped Wall Street expectations for a sixth straight quarter after initiating production at a fourth Guyana project.
• Chevron: Beat estimates as profits from the $53 billion Hess deal were included for the first time, boosting oil output and cash flow.
• Nvidia: CEO Jensen Huang said he still hopes to sell Blackwell chips to China at some point, though there are no current plans.
• Telefónica: Poised to cut its dividend as part of a new strategy plan, according to people familiar.
• Netflix: Exploring a bid for Warner Bros. Discovery’s studio and streaming assets, per Reuters, and approved a 10-for-1 stock split.

These updates cut across energy, semis, telecoms, and media, providing a broader read on capital allocation, regulatory constraints, and growth strategies.

The state of play: volatility, valuation, breadth

• Volatility: As Urbahn noted, big-cap moves increasingly hinge on rapid news flow, positioning, and sentiment. That creates air pockets on down days and sharp reversals on up days.
• Valuation: With megacaps leading, overall market multiples sit above long-term averages. Earnings outperformance helps, but the bar remains high.
• Breadth: The S&P 500 rally is healthier when leadership widens beyond the Magnificent Seven to include cyclicals, small caps, and defensives. Recent strength is still concentrated but improving on good days.

Investors balancing these forces are asking whether the AI spend cycle can deliver tangible revenue and margin gains across sectors. For now, the answer—especially after Amazon, Apple, and Nvidia headlines—is cautiously optimistic.

S&P 500 rally: what to watch next

To gauge whether the S&P 500 rally can persist into year-end, watch these signposts:

• Earnings follow-through: Guidance revisions and margin commentary from megacaps and second-tier beneficiaries of AI demand
• Fund flows: Whether inflows into equities remain steady; any pause could spark a pullback
• Rates and dollar: A stable 10-year yield near 4% and a range-bound dollar would be supportive
• Market breadth: Participation beyond megacaps, particularly in semis supply chain, software, and industrial digitalization
• Policy headlines: Trade chatter, export rules, and fiscal signals that may sway global growth expectations

Market snapshot (as of early New York trading; levels may change)

• S&P 500 futures +0.6%; Nasdaq 100 futures +1.2%; Dow futures -0.1%
• Stoxx Europe 600 -0.5%; MSCI World little changed
• 10Y U.S. Treasury ~4.10%; WTI crude ~60.26;gold 60.26;gold 4,011
• Bitcoin ~109,905;Ether 109,905;Ether 3,849

Reactions and updates from the Street

• “Bubble concerns seem to have been pushed back by the latest set of earnings,” one strategist note observed, adding that the AI theme is increasingly global.
• “AI’s leadership remains firmly in place,” said BofA’s Michael Hartnett, pointing to robust equity inflows.
• “We’re still watching whether heavy AI spending will pay off,” a buy-side analyst told Daily Known, flagging the need for revenue conversion and broader adoption.

As the narrative evolves, investors will parse each incremental data point—cloud growth rates, AI chip order visibility, export frameworks—for confirmation that today’s enthusiasm is justified.

Conclusion: momentum with a margin for error

With megacap tech reigniting sentiment, the S&P 500 rally is on the cusp of a sixth consecutive monthly gain. Amazon’s cloud surprise, Apple’s steady hand, and Nvidia’s global partnerships have reset the tone after a wobble, while stable rates and supportive flows help.

Risks remain—concentration, valuations, policy twists—but earnings resilience and persistent AI demand keep the bull case intact. If breadth widens and inflows continue, the S&P 500 rally has room to run. For ongoing coverage and market insights, visit DailyKnown.com.

FAQ’s

Article Source: Bloomberg
Image Source: Bloomberg