Bulls push S&P 500 back near records. What drove the market last week

Stock market bulls regained control after a brief hiatus last week, pushing the S&P 500 back to the brink of a record high. The index has advanced for eight consecutive weeks since its wartime trough in Iran on March 30; This marked his longest hitting streak since late 2023, when he combined for nine consecutive strikeouts. With a modest gain on Friday, the S&P 500 is now less than 0.4% below its record close of 7,501 on May 14. This was a big change from the beginning of the week, when old enemies like high oil prices and bond yields jeopardized the good times. Oil is trading well above $100 a barrel again, and the 30-year Treasury yield on Tuesday hit its highest level since 2007. Unsurprisingly, stocks didn't like it. The S&P 500 on Tuesday ended a three-session decline dating back to May 15, a losing streak not seen since March 26, 27 and 30. Just as in the early days of the Iran war, stocks were again taking their cues from oil and bond markets. The enthusiasm for artificial intelligence wasn't enough to break it. .SPX 3M mountain S&P 500 3 months The market went through a rough patch on Wednesday. Oil prices and bond yields fell, leading to a positive session for the S&P 500. This started the stock market's rise, just like the March 31 rally. Investors became optimistic after President Donald Trump said the United States was in the "final stages" of peace talks with Iran. The S&P 500 did not stop here and continued its rise until Thursday and Friday. It wasn't just the hope for a solution that guided last week's action. Nvidia, the powerhouse of the AI business, reported a strong quarter on Wednesday night, but not strong enough to push its own shares higher. Also on Wednesday, SpaceX filed for an initial public offering, expected to be the largest IPO in history. The remarkable comeback in cybersecurity stocks, including club name CrowdStrike, continued. Overall, the S&P 500 gained 0.9% over the five-day period. The tech-heavy Nasdaq and Dow Jones Industrial Average rose 0.5% and 2.1%, respectively. The blue-chip Dow finished the week at a record high. Let's take a closer look at the forces that drove last week's action. Nvidia's quarter Nvidia posted another blockbuster quarter late Wednesday. The company delivered growth and growth well above analyst estimates, and CEO Jensen Huang said "demand has gone parabolic." This reinforced our view that Nvidia is a must-have in the AI race, and we raised our price target per share to $260 from $230. Still, the stock fell 2.6% in the following session and 0.5% on Friday. It's a frustrating reaction, given that the shares are incredibly cheap relative to their peers and have plenty of room for further growth. The stock's post-earnings decline isn't that surprising to us; It's become a pattern in recent quarters, no matter how good the numbers look. At least shares of fellow Club name Arm jumped at launch. Nvidia highlighted strong demand for its new Arm-based Vera CPUs (central processing units). Nvidia has visibility of about $20 billion in total CPU revenue this year, CFO Colette Kress said. This is good news for Arm because the company receives royalty payments. Arm shares jumped more than 16% on Nvidia's earnings and gained 46% for the week. He was our best performer. But the stock has been trading for a while; It's up about 81% since we started the position in April. As Director of Portfolio Analysis Jeff Marks wrote in Friday's Homestretch, the parabolic move is why we'll sell some on Monday and probably cut some next week as well. Goldman's deal tripled Nvidia's earnings wasn't the only driver of Club shares' weekly gains. SpaceX filed for its highly anticipated initial public offering (IPO) on Wednesday, and shares of Goldman Sachs rose as the company took a leading role in the deal. Goldman was listed in SpaceX's prospectus as the highly coveted "lead lead" position. The investment bank will likely take the largest share of the fees, leading some of the most important parts of the stock's debut. This should be especially lucrative for Goldman, as SpaceX is expected to be the largest IPO in history. Elon Musk's rocket company's $1.25 trillion offering could raise $75 billion or more. That would be more than three times the largest U.S. offering ever: Alibaba's $25 billion IPO in 2014. More than $300 million in insurance commissions were paid to banks in Alibaba's IPO at that time. This accounts for approximately 1.2% of the e-commerce giant's total deal. Applying the same math to SpaceX, participating banks could generate over $900 million in revenue. “This is a big win for Goldman Sachs and evidence that Investment Club shares are at the top of all the majors,” Jim said. OpenAI may also be one of these "big ones". CNBC reported Wednesday that Goldman and Morgan Stanley are working on taking the artificial intelligence startup public. It's another monster deal, with OpenAI recently announcing a record $122 billion raise at a post-money valuation of $852 billion. Goldman may also snap up rival Anthropic as Claude's creator weighs plans to go public. Anthropic, meanwhile, is in talks with investors to raise money at a $900 billion valuation. Overall, more deals for Goldman mean more revenue for its key investment banking division; This is the main reason why we are in stock. It was great to see investors realize the value of Goldman's deal-making pipeline as shares hit records last week. Bank shares gained around 5% during the week. CrowdStrike's return It was another incredible week for CrowdStrike. Shares rose nearly 12% over the five-day period as Wall Street analysts issued bullish calls and the market continued to converge on the idea that cybersecurity names are not threatened by artificial intelligence adoption and should not be lumped in with general-purpose enterprise software stocks. At least seven Wall Street firms raised their price targets on CrowdStrike last week. Some of the most notable include KeyBanc, which rose from $525 to $700. While the updated PT is more of a catch-up call, it still represents a roughly 6% upside from Friday's close of $663. Analysts pointed to the improvement in demand for security. Cantor Fitzgerald rose from $550 to $700 a few days later, citing "pretty strong" first-quarter checks and rising earnings. Stifel, Morgan Stanley, Truist, TD Cowen and Barclays also raised their targets. The club did the same on Monday, raising our CrowdStrike price target from $500 to $650. We also increased our peer Palo Alto Networks from $200 to $255. Now that both stocks have exceeded these levels, we will have to re-evaluate. That's probably a call we'll make after earnings in June. CrowdStrike shares continue a six-week winning streak. Last week it was up 11.7%; up almost 12.6% in the previous week; and the week before that it was up almost 16%. Due to major advances like this, we've made two cuts since Monday, downgrading CrowdStrike to the equivalent of a 2. This is not because our beliefs have changed. Instead, it is an opportunity to capitalize on a parabolic move that may not be sustainable in the long term. We are cautious because CrowdStrike's 2026 outlook is very unstable. AI outage concerns had previously negatively impacted the entire cybersecurity group and software overall throughout February and March. But since Anthropic's Project Glasswing launched, the narrative around cyber has changed. The market sees what we always have: New AI models will increase demand because the risk of new cyberattacks has never been greater. (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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