US Markets Consolidate After Record Rally as Tech and Energy Sectors Diverge
Apple and Moderna surge on strong earnings, whereas US oil majors miss revenue targets due to production disruptions in the Middle East.
US equity markets experienced a mixed close on Friday as the broader rally following record highs began to consolidate. While the S&P 500 and Nasdaq Composite rose, the Dow Jones Industrial Average slipped slightly, reflecting a divergence in sector performance that characterised the session. The broader market action followed a powerful rally that had pushed major indexes to record levels earlier in the week, driven largely by standout earnings from Big Tech and other key sectors.
Technology and healthcare stocks led the gains, with Apple shares jumping nearly 5 per cent after reporting quarterly results that topped estimates for iPhone and China sales. This move pushed the stock back towards its all-time high zone, marking a sharp reversal from previous resistance levels. Similarly, Moderna stock jumped 7 per cent in premarket trading following a significant surge in international COVID-19 vaccine sales, with international revenue reaching $311 million compared to $78 million in the US.
Conversely, the energy sector faced headwinds despite strong operational performance. US oil supermajors Exxon Mobil and Chevron both beat estimates on earnings but missed revenue targets. This shortfall was attributed to stymied production throughout the Middle East and oil deliveries stuck behind the Strait of Hormuz, which weighed on overall energy sales. Geopolitical tensions regarding a US naval blockade on Iran have continued to cause volatility in oil and gold markets, complicating the outlook for these giants.
Corporate governance news also made headlines, with Occidental Petroleum announcing that CEO Vicki Hollub is retiring after a decade at the helm. Hollub, the first woman to lead a major US oil company, will continue to serve on the board of directors, while COO Richard Jackson is set to assume the role on June 1. Meanwhile, Spirit Airlines shares plummeted by 60 per cent after reports confirmed that a government bailout plan had collapsed, leaving the carrier without the necessary bondholder or government support to remain in business.
The Japanese yen also saw significant movement, surging 3 per cent after reports indicated the Japanese government intervened in the foreign-exchange market by buying yen and selling dollars. This action came after officials delivered a final warning to investors against selling the currency, aligning with a Group-of-Seven agreement to act only when there is a risk of excess volatility.
Investors are now turning their attention to the upcoming earnings report from Occidental Petroleum, scheduled for May 5, as the market digests the mixed signals from the week. Despite the consolidation, the three major stock market indexes remain comfortably above their levels at the start of 2026, buoyed by a resilient first-quarter earnings season and optimism regarding an AI demand boom.
