3 themes that drove stocks to another record week — and a banner month

Stocks rose to record highs again last week, capping off a big month for the market. Investors' optimism about an end to the Iran-U.S. war, a string of positive corporate earnings reports and strength in technology stocks led to new records for the S&P 500 and Nasdaq Composite, up more than 1% and 2%, respectively, in the holiday-shortened trading week. This extends the S&P 500's weekly winning streak to nine, while the Nasdaq has gained in eight of the past nine weeks. Friday also marked the last trading day of May; The S&P 500 and Nasdaq gained 5% and 8%, respectively. The Dow, which consists of 30 smaller stocks, gained just under 1% last week and is up nearly 3% for the month. Will the rise continue until Monday? According to the S&P Short Range Oscillator, the market is not yet in overbought territory with a reading of 2.63 percent. Anything above 4 percent indicates it may be time for stocks to pull back. Until then, there are three themes driving the market this past week. Peace progress has resulted in (perhaps) more mixed signals from the Middle East, but a positive development. Stocks rose on Wednesday as oil prices fell after Iranian state media reported that Iranian leaders want to return commercial traffic in the Strait of Hormuz to pre-war levels. But hours later, the White House called the report a "complete fabrication." The S&P 500 pulled back but still finished the session higher. A day later, Axios reported that U.S. and Iranian negotiators had finally reached a ceasefire agreement but would need President Donald Trump's approval. The headline sent stocks soaring, with the S&P 500 and Nasdaq closing at records on Thursday. The war continues to affect the market since foreign attacks began on February 28. Regardless, our advice remains the same: Don't make big moves based on a single headline. AI stocks are on the rise, led by strong quarterly earnings reports from big tech companies. Cloud-based data platform provider Snowflake took a quarterly beat and upgrade and issued a positive forecast for the second quarter late Wednesday. What was really exciting was Snowflake's AI computing deal with Amazon; that deal included a $6 billion commitment to Amazon Web Services over the next five years. The news helped renew excitement in the AI trade and led to a broader rally in the technology. Snowflake shares had their best day ever, rising over 36% in one session. Amazon shares have risen 0.7% and gained 1.6% since the beginning of the week. The AI rally gained momentum once again late Thursday on Dell's earnings; The company posted its fastest-ever revenue growth, fueled by fervent AI-related demand. Dell shares rose more than 32% on Friday, their best session ever. Other tech names linked to the AI business also participated. Broadcom rose 4.7% to an all-time high. Kol shares gained 5.3% in value. (We downsized the chip designer after a parabolic move on Tuesday.) Shares of Nvidia, whose graphics processing units are in Dell servers, gained nearly 1 percent. Jim Cramer said Dell's results strengthen his confidence in Nvidia, given their close ties to powering AI systems. "This is the one to buy," Jim said of Nvidia during Friday's morning meeting. Not every earnings release led to a rally. Salesforce had some progress on the top and bottom lines late Wednesday, but guidance remained clear. We were hoping CEO Marc Benioff could convince Wall Street that AI doesn't eat software. This did not happen. The stock fell about 1% in the following session but is still up over 6% for the week to date. On Thursday, Jim said the club would buy more if it wasn't restricted. Cyber blow It was a volatile week for cyber stocks as two corporate earnings reports told very different stories about the health of the sector. Zscaler's poor guidance led the stock to its worst single-day performance ever on Wednesday. Investors took the announcement as a read on industry peers, and shares of Club holdings CrowdStrike and Palo Alto Networks pulled back. We're not concerned, as Zscaler's problems appear to be company-specific rather than more systemic. None of this mattered when Okta reported a few sessions later. The company beat first-quarter estimates, citing increased demand for security tools driven by the rise of agency AI. As a result, Okta shares rose more than 30% on Friday. Palo Alto Networks and CrowdStrike rose 9.2% and 8.9%, respectively. We have long said that greater adoption of artificial intelligence will benefit both of our cybersecurity companies. Let's hope we hear something similar when Palo Alto and CrowdStrike report their quarterly results on June 2 and June 3. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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