Shift in investor focus

The U.S. stock market is closing May with a powerful rally, marking one of the strongest growth periods in recent years. The S&P 500 has already set its 26th all-time high since the beginning of the year and is posting its ninth consecutive week of gains. Such a streak is rare in itself, while historical data adds even more attention to the current situation: in previous periods when the market showed similarly strong first five months of the year, average annual returns later reached around 18.8%.

Despite record levels, the market does not show signs of broad overheating. On the contrary, capital is increasingly rotating into specific sectors, primarily technology, where the main concentration of earnings growth expectations for upcoming quarters is forming.

One of the key drivers of the current month has been the sharp rise in selected segments of the technology and energy markets. The computer hardware sector gained around 69%, solar energy rose by approximately 53%, and cybersecurity delivered growth of about 48%. This dynamic reflects not just speculative interest, but a structural reallocation of capital toward companies linked to artificial intelligence, digital infrastructure, and the energy systems powering new computing capacity.

Investor attention is now heavily focused on corporate earnings. The market is entering a phase where financial results are becoming the main driver of short-term price movements. At the center of attention remains Credo Technology (CRDO), which is targeting its ninth consecutive quarter of triple-digit earnings growth. Such a pattern is extremely rare and is typically seen only in companies positioned at the core of major technological cycles.

At the same time, investors are closely watching earnings from major sector leaders. These include Broadcom (AVGO), one of the key suppliers of artificial intelligence infrastructure solutions, as well as Palo Alto Networks (PANW) and CrowdStrike (CRWD), which form the backbone of the cybersecurity market. For these companies, not only current profitability matters, but also demand trends for their solutions amid accelerating digitalization and rising cyber threats.

Amazon (AMZN) is also drawing significant attention. Investors are anticipating a possible early start of the summer Prime Day sales event already in June. This factor traditionally impacts sales volumes and short-term revenue dynamics. Against the backdrop of Amazon’s large market capitalization, there is ongoing discussion about a scenario in which the company could approach a $3 trillion valuation, making it one of the most valuable companies in the world.

An additional source of uncertainty remains macroeconomic data. At the end of the week, the May U.S. labor market report (Non-Farm Payrolls) will be released. Expectations point to a moderate job gain of around 100,000 positions with unemployment at approximately 4.3%. For the Federal Reserve, this data will serve as an important reference point for assessing the future path of interest rates, while for the market it will be a key signal about the state of the economy under elevated equity valuations.

Overall, the current market environment is characterized by a combination of record indices and high capital concentration in specific sectors. This means that growth is becoming less broad-based and increasingly dependent on the performance of a handful of large technology companies and the overall macroeconomic backdrop.

Investors remain in a heightened state of attention: on one hand, a strong bullish trend and record highs; on the other, increasing dependence on a narrow group of market leaders and upcoming economic data. This combination is now shaping the key question: whether the market can sustain its growth momentum in the second half of the year, or whether current optimism will gradually transition into a more moderate phase of performance.