Another day, another spike to new all-time highs for the market.
This price action is ludicrous…
The S&P 500 ETF Trust (NYSE: SPY) is up 14% since April 1.
To put that in perspective, the SPY gained 17% in all of 2025… It’s currently rivaling that move in just two months.
It blew past the previous all-time highs with hardly a second thought. And after an overextended surge to new highs on May 13, it did it again on May 14.
Amid rising inflation, a war with Iran, and a pessimistic consumer…
How is this happening?
Clues From the Indices
Three major indices measure the market’s performance.
- S&P 500 ETF Trust (NYSE: SPY)
- Invesco QQQ Trust (NASDAQ: QQQ)
- Dow Jones Industrial Average ETF (NYSE: DIA)
The three have subtle differences, but in recent months, one difference has become glaringly obvious.
The Dow Jones’ lack of tech exposure is causing it to lag far behind the other two major indices.
See for yourself…
SPY:
QQQ:
DIA:
The Dow Jones hasn’t passed the all-time high yet. Whereas the SPY and QQQ did in mid-April.
The Reason for the Surge
It’s common for the market to behave as if there aren’t bearish catalysts in the world…
- Rising inflation
- The war in Iran
- Fearful consumers
You have to understand, the market doesn’t measure quality of life or the “vibes” here in America.
It measures the value of the world’s most successful companies.
We’ve all heard about it for years… the age of AI is here. And tech companies are reaping the benefits.
Over the last few weeks, one after another, tech companies reported bullish earnings that pushed the SPY and QQQ higher.
And the most recent was from Cisco Systems Inc. (NASDAQ: CSCO) on May 13, after the bell.
Another Tech Earnings Boom
CSCO confirmed the thesis all over again.
- Q3 fiscal 2026 earnings of $1.06 per share, which beat estimates and grew 10% year over year.
- Revenue of $15.84 billion came in 12% higher than the same quarter last year.
But the real story is buried in the AI numbers…
CSCO booked $1.9 billion in hyperscaler AI infrastructure orders this quarter alone. Year-to-date, that figure sits at $5.3 billion. And management raised expected hyperscaler AI orders to roughly $9 billion for fiscal 2026.
The stock gapped from around $101 to over $116 the next morning.
That’s a 15% overnight pop on an established large-cap name.
This is what’s pulling the SPY and QQQ to new highs while the DIA lags.
How to Trade an Overextended Tape
Here’s where it gets tricky…
The SPY is up 14% in six weeks. The QQQ has shot higher since early April.
And we still have rising inflation, an open war with Iran, and a consumer running on fumes sitting in the background.
That’s a setup screaming for volatility in both directions.
Watch major levels. Numbers ending in 0 and 5. That’s where momentum stalls and reversals start.
The SPY is in price discovery above $745. The QQQ is in price discovery above $720. Those are the lines in the sand.
A break and hold above means the trend continues. A failed breakout with a hard reversal is your signal that the air is finally too thin.
Don’t force a directional bet. If the chart isn’t telling you which way it wants to go, the answer is to wait. Cash is a position. Patience is a position.
The market is going to give us a setup. It always does.
The traders who win in this kind of environment aren’t the ones with the loudest opinions. They’re the ones who let the chart talk first.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
