The rally resumed Thursday as expected. It began with strength for big-capitalization technology issues and ended with a surprising move higher for smaller stocks, notes Jon Markman of Pivotal Point.

The Russell 2000, a key benchmark for small-cap issues, started Thursday almost 1% lower yet the index ended with a gain of 0.85%. The broadness of the rally suggests much higher prices are likely.

The S&P 500 index closed Thursday at 4,097. I expect a strong rally through that level in the near term. Support is 4,000.

The Dow rose 0.2% to 33,503.57, while the S&P 500 (SPX) was higher by 0.4%. The Nasdaq 100 rose by 1%. Technology led the gainers while the energy sector posted the biggest decline.

Breadth favored advancers over decliners, 2-1. There were 566 new highs and 44 new lows. Topping the new highs list was Microsoft (MSFT), followed by Alphabet (GOOGL), Facebook (FB), Oracle (ORCL), Lowe’s (LOW), Starbucks (SBUX), and BlackRock (BLK). It’s the return of the Jedi!

In data land, initial jobless claims posted a surprise increase to 744,000 during the week ended April 3 from 728,000 in the previous week. Analysts expected 680,000 claims. The four-week moving average climbed by 2,500 to 723,750.

"The uneven composition of claims makes the data difficult to trust, especially considering that the ongoing reopening process should be putting more downward pressure on claims," Jefferies economists said while noting large claim increases in California and New York.

The US 10-year yield fell to 1.62%. That’s still super-cheap; go buy something on credit.

One of the worst performers was Constellation Brands (STZ), with shares down by 4.6%. The firm reported lower fiscal fourth-quarter profit on higher revenue, beating Wall Street estimates, but it issued a fiscal 2022 outlook that lagged market expectations. I'll drink to that.

Bottom line: The mood among investors is positive but not irrational as we head into one of the most upbeat stretches of the entire calendar for stocks—and earnings straight ahead should only add to the mood. Don’t overthink this; our recommended positions should lead, or if you prefer diversification, any of the broad ETFs like SPY and QQQ are appropriate.

Unless…hmm…

Learn more about Jon Markman at Pivotal Point.