MW Stocks take a breather on Wednesday as torrid rally cools - putting potentially historic S&P 500 winning streak in jeopardy
By Christine Idzelis
A gain this week would mark the 10th straight for the index - the longest such streak since 1985
The torrid stock-market rally got a reality check on Wednesday.
The powerful stock-market rally took a breather on Wednesday after a solid stretch of gains. As of the closing bell, the S&P 500 had wiped out its advance from earlier in the week, placing a lengthy weekly winning streak in jeopardy.
The widely followed U.S. equities benchmark has risen rapidly over the past two months, helped along by a strong first-quarter earnings season. But after nine straight weeks in the green and a fresh record high on Tuesday, the S&P 500 SPX finished Wednesday in the red.
Should the index manage to get back on course and clinch a 10th straight winning week, it would mark its longest streak of weekly wins since 1985, according to Dow Jones Market Data.
In the past, long weekly winning streaks have typically presaged more gains for the index, following some near-term weakness.
The chart below shows how the S&P 500 historically has performed after weekly winning streaks of nine weeks or more - with the index on average seeing gains one, three and six months later.
DOW JONES MARKET DATA
"A lot of the gains that we've seen, we think, are due to great earnings," but now first-quarter earnings season is "largely in the rearview mirror," said Chris Zaccarelli, chief investment officer for Northlight Asset Management, in a phone interview Wednesday. "Gains from here are going to be a little bit more challenged, unless we can get some of those issues resolved in the Middle East."
Zaccarelli said that renewed concerns about the Iran war were weighing on the stock market on Wednesday. Investors are wrestling with the fact that the conflict hasn't been brought to a tidy resolution, he said. The elevated oil prices and higher bond yields that the conflict has triggered could make it more difficult for stocks to keep pressing higher in the near term.
The Associated Press reported Wednesday that the fragile cease-fire between the U.S. and Iran was again tested as Kuwait briefly shut down its main airport after Iranian drones damaged a terminal, killed a person and injured dozens.
The U.S. stock market finished lower on Wednesday as West Texas Intermediate crude-oil prices climbed (CL00) and Treasury yields BX:TMUBMUSD10Y rose. The S&P 500 fell 0.7% on Wednesday, leaving it with a modest weekly loss of 0.3%, according to Dow Jones Market Data.
Zaccarelli said inflation worries persist in the U.S. amid higher oil prices. Yet these worries have been counterbalanced in part by signs that the U.S. economy remains in good shape, with GDP growth remaining solid while the labor market is "hanging in there." The next official employment report from the Labor Department will be released on Friday, with the highly anticipated data providing a window into jobs growth in May.
Other major U.S. stock benchmarks also ended lower Wednesday, with the Dow Jones Industrial Average DJIA dropping a sharp 1.2% and the technology-heavy Nasdaq Composite Index COMP falling 0.9%. The Dow and Nasdaq had also booked all-time highs Tuesday, but along with the S&P 500, both indexes are now down on the week through Wednesday.
-Christine Idzelis
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 03, 2026 16:58 ET (20:58 GMT)
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