Stocks closed sharply higher yesterday with all of the major indexes in the green. The tech-heavy Nasdaq led the way with 2.03%; followed by the mid-cap S&P 400 with 1.82%; the small-cap Russell 2000 with 1.47%; the S&P 500 with 1.46%; and finally the Dow with 1.24%.

All of the above indexes made new all-time highs in the process, save for the Dow. But they are within striking distance of that mark as they only need another 1.21% to cross that threshold to new all-time highs.

YTD, in order of gains, the Russell 2000 is up 16.31%; the S&P 400 is up 12.86%; the Nasdaq is up 11.17%; the S&P is up 7.59%; and the Dow is up 3.84%.

Optimism over a possible peace deal has lifted the market, and it has taken oil off its recent highs. Word is that an agreement could be signed within days.

The market also overlooked reports that the U.S. fired upon an Iranian oil tanker that tried to breach the ongoing U.S. Naval blockade.

But the biggest driver over the last several weeks has been stellar earnings, especially by big-tech and AI related names. Many of the growth rates have been stunning. Lots of upward guidance. And the common theme propelling these numbers has been attributed to AI.

For example, on Wednesday afternoon, Advanced Micro Devices posted a positive EPS surprise of 5.38%, and a positive sales surprise of 4.09%. That translated to a quarterly EPS growth rate of 42.7% vs. this time last year, and a sales growth of 37.8%. They once again cited strong AI demand for their results saying the quarter was "driven by accelerating demand for AI infrastructure." They also guided next quarter's revenue estimate to $11.2 billion vs. the consensus for $10.52B (a 6.46% upward revision above the current estimates). They were up a whopping 18.61% yesterday.

After the close yesterday we heard from ARM Holdings. They posted a positive EPS surprise of 3.45%, and a positive sales surprise of 1.67%. That equated to a quarterly EPS growth rate of 9.09%, and a sales growth of 20.1%. They noted a "massive shift toward AI-integrated hardware," and that the "AI licensing cycle is accelerating." They also raised next quarter's EPS and revenue guidance above expectations with EPS projected at 40 cents vs. 36 cents, and revs at $1.26B vs. $1.25B. They were up 13.63% in the regular session before earnings, but were down by roughly -9% in after-hours trade following earnings. For context, they are up 117% YTD.

Today we'll hear from another 486 companies on deck to report including McDonald's, Gilead Sciences, and Motorola Solutions to name a few.

In other news yesterday, the ADP Employment Report came in at 109,000 new private payroll jobs for April vs. estimates for 85,000.

But the jobs report everybody is really waiting for is the Employment Situation Report by the Bureau of Labor Statistics (BLS) on Friday. At the moment, the consensus is calling for 67,000 new private sector jobs. If the ADP report is correct, that could set up the BLS report for a big upside surprise. Granted, the ADP report has a spotty track record of forecasting what the BLS will say. Nonetheless, it was a big beat. We'll see if that translates to the official government stats.

In the meantime today, we'll get Weekly Jobless Claims, the Challenger Job-Cut report, and Construction Spending.

What a rally. And if momentum continues, we could see brand new records yet again today.

See you tomorrow,