Investing.com — The U.S. stock market rally that began on March 31 remains intact despite oil over $100, software sector turbulence and unresolved Middle East tensions, according to Yardeni Research, which says the economy continues to ace its stress tests.
climbed again on Thursday evening after reports emerged that Iran’s lead negotiator, Mohammad Bagher Ghalibaf, resigned from peace talks due to interference from hardliners within the Islamic Revolutionary Guard Corps.
Yet Yardeni Research notes that futures markets are still signaling a sharp oil price decline over the next 12 months, and that sentiment indicators show the bull/bear ratio is not yet “high enough to give us pause about the stock market rally.”
Software stocks took a hit Thursday, with falling 18% after flagging Middle East deal delays and dropping 7% on slowing Red Hat growth.
’s announcement of voluntary buyouts for long-tenured employees added to the gloom, signaling what Yardeni describes as “a massive internal reorganization to pivot away from traditional software toward pure-play AI efforts.”
Investors are rotating into hardware, with semiconductors gaining ground. surged as much as 20% after hours on a strong earnings beat.
Economic data provided further reassurance. Jobless claims remain well below long-run averages, and April’s flash PMIs were strong, with both the Services and Manufacturing indices showing broad-based acceleration.
Yardeni cautions, however, that a portion of manufacturing gains reflects precautionary inventory building ahead of anticipated supply shortages rather than genuine demand acceleration, with supplier delivery times deteriorating to their worst levels since mid-2022.