The week opened ugly and closed at a record. Monday the 10-year Treasury yield touched its highest level in a year and the Nasdaq and S&P 500 sank to start the week. Tuesday made it three straight down sessions for the S&P. Wednesday flipped the tape: Nvidia reported earnings that beat and guided above expectations, and SpaceX filed for its initial public offering the same day. Thursday the Russell 2000 ripped 2.56% higher on a premature report that a U.S. and Iran draft resolution was near, while the S&P slipped 0.45% and the Nasdaq fell 0.50%. Friday the Dow rose 294 points to a fresh record into the holiday weekend. For the five sessions the S&P 500 gained 0.9%, its eighth consecutive weekly advance and the longest streak since 2023. The Nasdaq added 0.5%. The Russell 2000 led everything at plus 2.7%. The May flash PMI composite printed 51.7 with manufacturing at a four-year high and services softening.
The story underneath the indexes was leadership rotation. One week earlier the Russell 2000 lost 2.44% in a single session as levered small-cap positioning unwound. This week the same index led the entire tape. That round trip in seven sessions tells you the May 15 selloff was positioning, not thesis. Yields stayed elevated all week and small caps absorbed them anyway, which is the opposite of the rate-sensitivity script. Nvidia delivered another validation of the AI infrastructure thread, but the muted reaction in the stock is its own signal: when a beat and a raise produce a dip, expectations have become the risk, not the results.
The quieter event with the longer fuse was the SpaceX S-1. A filing is not a listing, but it starts the supply clock. Every mega-IPO in registration is a standing claim on the marginal equity dollar, and small caps live furthest from that dollar. For micro-cap allocators the week reinforced two things: the small-cap bid is real when the macro gives it room, and the calendar of coming issuance is now a macro factor worth tracking alongside yields.
Coverage ledger: BTBT sits directly on the AI infrastructure thread that Nvidia validated again this week; its HPC segment scales with exactly this demand. CXDO benefits from the same capacity buildout one layer up the stack in white-label UCaaS. AEYE’s recurring revenue base is the structural counterweight when yield days hit the tape. Full dossiers in the research library.