Category: Newsletter

This past week, markets were driven by trade policy shocks, monetary policy developments, and solid corporate earnings, creating a push-and-pull dynamic for investor sentiment. President Trump’s announcement of sweeping “reciprocal” tariffs, doubling duties on Indian imports and imposing broad levies on semiconductors and pharmaceuticals, rekindled trade war concerns and injected fresh geopolitical risk into the outlook. However, that was offset by Apple's announcement that it would inject $600 billion into building factories in the U.S. to bypass those tariffs. The positive response to Apple's deal with the White House sent the stock and the Nasdaq higher on the week.

Markets traded mixed last week as macro headwinds collided with high-stakes earnings. The S&P 500 slipped -2.36%, while the Nasdaq fell 2.17% in a volatile tech-led week. Most of that decline came on Friday following a much weaker-than-expected jobs report and a resurgence in tariff announcements. Here are the data highlights.

The S&P 500 closed the week at 6,388.64, notching another fresh record high and extending one of the longest weekly winning streaks in the past three years. This persistent rally has been fueled by a potent combination of strong earnings from tech bellwethers, growing expectations of Fed rate cuts later this year, and an abundance of investor liquidity chasing momentum. So far, 87% of companies reporting through Thursday had beat expectations, primarily in Industrials, Financials, Healthcare, and Technology.

As markets close the week after setting fresh all-time highs, the near-term outlook remains cautiously constructive but demands more tactical positioning. Earnings season is ramping up, and early reports from sectors like consumer staples, airlines, and semiconductors have reinforced the bullish narrative, helping propel the S&P 500 to new records. However, technical indicators, including stretched RSI levels and flattening MACD histograms, signal that short-term momentum could reach exhaustion levels, particularly in mega-cap growth stocks.

The S&P 500 closed the week in positive territory, marking another strong performance near record highs. While the index briefly hit new all-time levels midweek, the rally lost some steam on Friday as investors grew cautious ahead of key inflation data and Trump's most recent tariff announcements. However, volatility remained subdued despite those announcements, as complacency remains high despite stretched valuations and upcoming catalysts.

Markets kicked off the second half of 2025 with a strong finish to Q2, propelled by easing geopolitical fears, falling oil prices, and a reaffirmation of the Fed’s dovish tone. The S&P 500 rose 3.4% in the final week of June to close at new record highs.

The S&P 500 and the Nasdaq both set all-time highs this week. This feat seems remarkable given the barrage of negative headlines, geopolitical risks, and a Federal Reserve intent on not cutting rates. However, the bulls remain decisively in control of the market as it closed above the 6100 level amid a backdrop of weakening economic data, dovish undertones from the Federal Reserve, and continued strength in mega-cap tech. Despite some pockets of sector underperformance, key technical indicators suggest bullish momentum remains intact, but with caveats beneath the surface.

The market continued to trade in a back-and-forth pattern this week as it consolidated recent gains. Negative news headlines from the ongoing Iran-Israel conflict continue to push and pull traders daily. Notably, the market held support at the 20-DMA, keeping the bullish trend intact. However, the market did break below the "rising wedge" pattern, increasing the potential for a further consolidation to work off the current overbought conditions.

The market's bullish trend continued this week, and it is rapidly approaching all-time highs. However, an Israeli strike on Iran early Friday morning sent stocks tumbling at the open, but as of midday, as I am writing this report, most of the initial decline has fully recovered. We noted that a correction or consolidation process is needed to work off some short-term overbought conditions. But, as seen on Friday, any pullback is quickly bought by investors chasing the market in the near term.