S&P 500 and Nasdaq Reach New Highs with Only 37.8% of Stocks Advancing

Author: Shenchao TechFlow

On Monday, the S&P 500 and Nasdaq once again hit new all-time closing highs, but the atmosphere this time was markedly different from previous occasions.

The S&P 500 rose 0.19% to close at a record high of 7,412.84. The Nasdaq climbed 0.10% to close at 26,274.13, also setting a new closing record. The Dow gained 95.31 points (0.19%) to close at 49,704.47, still 295 points away from the psychological milestone of 50,000—a level that has become Wall Street’s most persistent barrier.

But hidden within these all-time highs is a concerning number: only 37.8% of all stocks closed higher. Within the S&P 500, six sectors ended in green and five in red—the all-time highs were driven by the heaviest weightings among those six sectors, not by broad market strength.

This pattern—where an index reaches a new high while most stocks decline—has a specific term among technical analysts: negative market breadth. It doesn’t necessarily mean the market will fall immediately, but it signals that this rally is increasingly reliant on a few standout names rather than broad-based participation. Beneath the surface of the index’s impressive performance, the market is quietly diverging.

The strongest-performing sector today was Energy (+2.63%), followed by Materials (+1.43%), Industrials (+1.01%), and Information Technology (+1.00%). However, Communication Services declined 2.33%, with Alphabet falling 2.55% in a single day, dragging the entire sector into negative territory. The Consumer Discretionary sector dropped 0.76%, as signs of ongoing erosion in consumer confidence due to high oil prices are now spreading from the University of Michigan Consumer Sentiment Index to stock prices.

The rise in energy stocks is driven by oil prices: Brent crude rose back above $103/barrel on Monday, while WTI increased approximately 2.78% to $98.07. This reflects the market’s immediate pricing in of the delayed peace process following Trump’s weekend announcement on Truth Social that he would “completely reject” Iran’s proposal. Every step back for the peace narrative pushes energy stocks higher, but at the same time, consumers, manufacturers, and airlines are footing the bill.

Copper prices quietly reached a historic closing high today, closing at $6.4605 per pound, with a gain of over 13% since the start of 2026. The rally in copper is driven by two factors: first, the Iran conflict has restricted exports of copper-related minerals from the Middle East; second, structural demand from AI data centers, electric vehicles, and grid modernization. It is one of today’s most overlooked—but potentially most significant—price signals in the long term.

The 10-year U.S. Treasury yield rose 4.6 basis points in a single day to 4.41%, while the VIX panic index climbed more than 7%. Placed beside the headline "All-Time Highs," these figures create a subtle tension: both the index and interest rates are rising, along with volatility—suggesting mounting pressure beneath an otherwise calm surface.

Late Sunday night, Trump posted on Truth Social:

I just finished reading the response from Iran’s so-called "representative." I don’t like it—it’s completely unacceptable!

This is Trump’s official response to Iran’s latest peace proposal, submitted through Pakistan as an intermediary. Iran’s conditions include: the withdrawal of U.S. troops from the Strait of Hormuz, the unfreezing of all Iranian assets, the lifting of all sanctions, recognition of Iran’s sovereignty over the Strait of Hormuz, and the cessation of military actions against Iran’s allies in Lebanon and surrounding regions.

On Monday, a spokesperson for Iran’s Ministry of Foreign Affairs responded at a press conference that these conditions were "generous and reasonable" and constituted a "responsible regional security proposal." Iran also added a statement that prompted the legal advisors of European oil tanker companies to hold emergency meetings that same day: any British or French warship entering the Strait of Hormuz "will face a decisive response."

At a White House meeting on Monday afternoon, Trump told reporters that the ceasefire agreement was "on massive life support" and described its current state as "incredibly fragile." He said Iran's proposal was "in the wrong direction" and that there was no specific schedule for the negotiations.

This is the closest the two countries have come to fully breaking relations since the war in Iran began nearly eleven weeks ago. But the market did not collapse, thanks to a pricing mechanism that has been repeatedly tested: rhetorical stalemates are discounted in the absence of new actual military action. WTI rebounded from $91 on Friday to $98, but did not repeat the panic-driven surge to $126. The market is learning the rhythm of this war.

Schwab’s Chief Investment Strategist, Liz Ann Sonders, made a thought-provoking comment in her daily market commentary: “Given the lack of progress toward peace, high oil prices, and extreme concentration in the technology sector, it’s hard to tell whether the market has begun to lapse into complacency.” This was not a casual remark—it was the word “complacency” uttered publicly by one of Wall Street’s most rigorous analysts.

At 8:30 AM today (May 12), the U.S. Bureau of Labor Statistics will release the April Consumer Price Index (CPI). This is the most important data release of the day and the single most information-dense data point of the entire month so far.

Expected consensus: Headline CPI up 0.6% month-over-month and 3.7% year-over-year (above March’s 3.3%); core CPI up 0.3% month-over-month and 2.7% year-over-year.

Why this data set is more complex than any previous CPI: This is the first CPI report after tariffs took effect on April 2. Moving from March’s energy-driven inflation (gasoline +21.2%, nearly single-handedly pushing up the entire index), April’s inflation now faces two叠加 pressures:一是 oil prices remain stubbornly high (WTI averaged $98–105/barrel in April), and 二是 the impact of tariffs begins to permeate price chains for clothing, electronics, furniture, and auto parts.

What the market cares about most is not the headline number, but the details of core CPI.

If core CPI exceeds 0.3%, especially surpassing 0.4%, it indicates that high oil prices are transmitting through transportation costs and industrial goods prices into non-energy commodities, and the "second-round effect" of inflation is beginning to be measured in the data. For the Fed, this would completely shut down any discussion of rate cuts, and Warsh’s first meeting as chair (June 17) will take place under a very uncomfortable macroeconomic backdrop.

If core CPI remains moderate (in the 0.2%-0.3% range) or comes in below expectations, it suggests that the spillover effects of high oil prices are still being absorbed within the energy sector, and the underlying inflation trend remains relatively stable. This could allow markets to reconsider the possibility of rate cuts in the second half of the year, although the probability remains extremely low.

Bank of America has completely abandoned its 2026 rate cut forecast, pushing the expected first rate cut to the second half of 2027. JPMorgan’s baseline scenario is that inflation will remain above 3% until early 2027, regardless of whether negotiations take place. In a recent interview with Yahoo Finance, S&P Global Ratings’ Chief Economist Paul Gruenwald provided his inflation forecast for the year: annual CPI around 5%.

The disagreement among these three institutions reflects the real challenge of current inflation forecasting: no one knows when the Strait of Hormuz will reopen, and all figures are conditional probabilities based on an unknown variable.

On the same day, the second major event: Trump arrived in Beijing with a 16-member business delegation, including Elon Musk, Tim Cook (Apple), Sundar Pichai (Google), and Sam Altman (OpenAI). The publicly stated agenda focused on trade and rare earths, but the market was truly awaiting two key developments: First, a bilateral agreement on AI regulatory frameworks—if the U.S. and China can reach even a framework-level accord on AI safety testing and data sovereignty, the semiconductor and AI application sectors could experience a renewed narrative revaluation. Second, whether China is willing to exert pressure on Iran. As Iran’s largest oil buyer and its most critical dependency for the Strait of Hormuz, if Beijing signals a demand for Tehran to reopen the strait, it could become the most powerful external catalyst for the entire peace process.

Brent crude closed near $103 on Monday, while WTI closed at $98.07, marking the second rebound since last week’s pullback from a high of $126. The blockade of the Strait of Hormuz remains in place, and Chevron’s CEO’s statement still holds true—even if an agreement is reached, it will take months for supply to normalize.

But what matters most today is not the absolute level of oil prices, but their momentum. From $99 on May 6 (as anticipated in the "one-page memo") to $103 on May 11 (after Trump rejected the proposal), Brent crude rebounded 4% in just four days. This resilience tells the market: every retreat in peace expectations is quickly followed by oil prices recovering most of their losses. $100 is no longer a ceiling—it’s a floor.

Gold held steady in the $4,700–4,720 range on Monday, continuing its sideways pattern over the past several weeks. The primary pressure came from rising U.S. Treasury yields, which climbed to 4.41%, as higher interest rates continue to suppress gold’s rebound momentum through elevated holding costs. Following today’s CPI data release: if inflation exceeds expectations → the dollar strengthens → gold faces downward pressure; if inflation is moderate → expectations for rate cuts slightly revive → gold gains room to rebound. Today, gold serves as an invisible ballot box for the CPI data.

On Monday, Bitcoin traded sideways in the $81,000–82,000 range, failing to achieve a sustained breakout above $82,228 (the 200-day moving average). Ethereum was around $2,400, and the global crypto market cap remained near $2.70 trillion, with the Fear & Greed Index holding in the 52–55 range (neutral).

The data confirmed by CryptoQuant last week remained valid on Monday: $81,486 is the average cost basis for short-term holders and the area of strongest selling pressure for Bitcoin. Shorts have set up a barrier here, and every time longs approach, they encounter resistance.

Today’s (May 12) CPI data will directly impact intraday crypto price movements. Historical patterns show that higher-than-expected CPI → immediate decline in risk assets → short-term pressure on Bitcoin; lower-than-expected CPI → slight boost in rate cut expectations → Bitcoin may test above $82,000. However, regardless of the outcome, $83,700 (the average cost basis for spot ETF holders) is the key price level Bitcoin must convincingly hold above to demonstrate that institutional buying has shifted from "unrealized losses" to "unrealized gains," thereby unlocking the next upward phase.

After hours yesterday, an industry update deserves attention. GitLab announced a strategic restructuring after market close: layoffs, reduced geographic coverage, and management cuts, shifting the company’s focus from traditional DevOps tools to Agentic AI. This follows Shopify, marking another mid-sized SaaS company publicly acknowledging during earnings season: “What we once relied on is being disrupted by AI, and we need to rebuild from the ground up.” In an internal memo, CEO Bill Staples wrote: “This is a structural migration of our entire codebase and way of working—not an optimization, but a transformation.”

This narrative is a third perspective on the same phenomenon described by Lisa Su’s statement that “Agentic AI is driving CPU demand” and Amodei’s claim that “the SaaS moat is disappearing”—a software company actually living through it, turning theoretical propositions into a time-stamped business reality through layoffs and strategic shifts.

On May 11, both the S&P 500 and the Nasdaq reached new all-time highs, but less than 40% of individual stocks closed higher, making the divergence in market internals more noteworthy than the price movements.

U.S. stocks: S&P 500 closed at 7,412.84 (+0.19%), Nasdaq closed at 26,274.13 (+0.10%), both reaching all-time highs. Energy led gains up 2.63%, while Communication Services led losses down 2.33%; Alphabet fell 2.55%. Copper hit a record high at $6.4605. The 10-year U.S. Treasury yield rose to 4.41%, and the VIX increased 7%. Market breadth was extremely weak (only 37.8% of stocks advanced), making this the most concerning internal signal during the seven-week rally.

Iran/Oil: Trump declares "no acceptance whatsoever" of Iran's proposal; Brent rises back to $103, WTI climbs to $98.07. The ceasefire agreement is described as "fragile," and the timeline for the peace process has been reset to zero.

Cryptocurrency: Bitcoin is trading sideways between $81,000 and $82,000, with resistance at $82,228 (200-day moving average) remaining unbroken. GitLab’s restructuring signals a bet on agentic AI, representing the latest high-profile example of AI transformation pressures in the SaaS industry.

Today’s most important question: What will April’s CPI tell us?

If core CPI exceeds 0.3%, rising oil prices have begun to seep into non-energy goods, and Warsh’s policy space after taking over the Fed will be more constrained than anyone expects; equities will face pressure at elevated levels, and Bitcoin will encounter short-term selling pressure. If core CPI remains moderate, the energy shock in March is partially offset in April, and rate cut expectations experience a mild rebound, tech stocks still have upside potential.

In addition, Trump landed in Beijing today. If the summit yields tangible outcomes regarding an AI regulatory framework or rare earth supply, the semiconductor sector could see a revaluation tomorrow. If China clearly signals its willingness to pressure Iran to reopen the Strait of Hormuz, it would carry more weight than any written memorandum.

At least as of yesterday, one thing was certain: a new all-time high with only 30% of stocks participating is precisely the type of record high that requires the utmost caution.