A stunning three-day rally has catapulted the major indices back near their June all-time highs and, once again, has set a clear mandate for who has control of the market. The S&P 500 (SPX) has jumped 4% after almost reaching its 50-day average just three days ago. More impressively, the Nasdaq 100 (QQQ) has exploded 7.3% over the same time and has booked daily gains of more than 3% in two of the past three days. These are the best short-term advances since stocks were emerging from the "tariff tantrum" in April of 2025. Quick moves like this for the QQQ generally happen when the ETF is forming either a bottom after a correction/bear market or when it is breaking out after a decent decline and completing the bottoming process. This strength usually is not seen coming out of a minor 4.5% decline (as we just had).

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Ed Yardeni, president of Yardeni Research, recently described the stock market as moving in 'Toy Story' fashion 'to infinity and beyond.' On Wednesday, the major indices rose another 1.5%-2.1% and printed their second straight upside price gap, this as the AI train continues to roar down the track. Once again, the scorching semiconductor stocks led, ripping 5% higher based on the SMH and SOXX ETFs, as well as the Dow Jones Semiconductor Index. Starting from the largest players, the almost $5 trillion market cap NVDA rose almost 6%, TSM was up 6.4%, AMD 19%, ASML 7%, LRCX 8%, ARM 14%, and ACLS 22%. Electrical component and electronic equipment stocks continued to soar, with GLW up 12%, JBL 10%, FLEX 38%, IPGP 12%, and VECO 25%. Industrials also did well on the back of the airlines, aerospace, commercial vehicles and trucks, and industrial machinery. Two other less-discussed areas of the market that also are benefiting from AI include rare earth and lithium stocks. The VanEck Rare Earth and Strategic Metals ETF (REMX) has soared 38% since March 20, while the Global X Lithium ETF (LIT) has spiked 37% since March 20. Energy (XLE) dropped 4% and exploration & production (XOP) fell 6% as WTI slipped 6%, dropping back to $96/barrel and Brent declined 7% to $102/barrel. Longer-term breadth measures remain terrible considering how far the mega-cap, mid-cap, and small-cap indices have rallied since March 30. Some 58% of S&P 500 stocks are above their 200-day line. For the S&P 100, it is 60%, and for the Nasdaq 100, it is 56%. Typically, these readings are in the 70% to 80%-plus region during strong advances.

Ed Yardeni, president of Yardeni Research, recently described the stock market as moving in 'Toy Story' fashion 'to infinity and beyond.' On Wednesday, the major indices rose another 1.5%-2.1% and printed their second straight upside price gap, this as the AI train continues to roar down the track. Once again, the scorching semiconductor stocks led, ripping 5% higher based on the SMH and SOXX ETFs, as well as the Dow Jones Semiconductor Index. Starting from the largest players, the almost $5 trillion market cap NVDA rose almost 6%, TSM was up 6.4%, AMD 19%, ASML 7%, LRCX 8%, ARM 14%, and ACLS 22%. Electrical component and electronic equipment stocks continued to soar, with GLW up 12%, JBL 10%, FLEX 38%, IPGP 12%, and VECO 25%. Industrials also did well on the back of the airlines, aerospace, commercial vehicles and trucks, and industrial machinery. Two other less-discussed areas of the market that also are benefiting from AI include rare earth and lithium stocks. The VanEck Rare Earth and Strategic Metals ETF (REMX) has soared 38% since March 20, while the Global X Lithium ETF (LIT) has spiked 37% since March 20. Energy (XLE) dropped 4% and exploration & production (XOP) fell 6% as WTI slipped 6%, dropping back to $96/barrel and Brent declined 7% to $102/barrel. Longer-term breadth measures remain terrible considering how far the mega-cap, mid-cap, and small-cap indices have rallied since March 30. Some 58% of S&P 500 stocks are above their 200-day line. For the S&P 100, it is 60%, and for the Nasdaq 100, it is 56%. Typically, these readings are in the 70% to 80%-plus region during strong advances.