Weekly Stock Market Update & SPY Technical Analysis
“Timberrrr!” went memory and semiconductor stocks last week as investors took profits and began questioning just how much upside remains in the AI trade. After months of relentless gains, many of the market’s biggest winners suddenly became its biggest losers, reminding investors that even the strongest themes eventually need a breather.
Is the AI rally over?
The market should start getting its answer over the coming weeks as the world’s largest technology companies involved in the AI buildout report quarterly earnings. Right now, there are only two things that can restore investor confidence…strong corporate earnings and lower interest rates.
The interest rate picture remains uncertain. Rising energy prices have complicated the inflation outlook, making it difficult to know when, or if, the Federal Reserve will resume cutting rates. The good news is that earnings season has started on a strong note. JPMorgan reported the highest quarterly profit ever recorded by a U.S. bank, driven by a surge in investment banking and trading activity. Goldman Sachs also delivered blockbuster results as investment banking and trading revenue soared, while Bank of America, Citigroup, and Wells Fargo all topped Wall Street expectations. Together, the results suggest that both corporate activity and the U.S. consumer remain far more resilient than many investors feared.
Now the focus shifts to the companies that have actually been driving this bull market. Over the next two weeks, investors will hear from Alphabet, Tesla, Intel, and many of the world’s largest technology companies. If they can deliver another round of strong earnings and reassure investors that AI spending is translating into real profits, the recent selloff could prove to be nothing more than a healthy reset. If not, the correction may have further to run.
Economic Calendar
- Leading Indicators (Mon)
- Federal Reserve Board of Governors closed meeting (Mon)
- Weekly Jobless Claims (Thu)
- U.S. Flash Manufacturing PMI (Fri)
- U.S. Flash Services PMI (Fri)
- New Home Sales (Fri)
We’ll be covering these reports in real time as they’re released through the week + any market / industry specific implications they have.
See our latest watchlist here.
SPY Technical Analysis & Near Term Market Moving Headlines
Last week’s price action was mostly uneventful until Friday, when the market gapped lower following a serious escalation in U.S.–Iran tensions. The situation worsened over the weekend after multiple U.S. service members were reportedly killed in Iranian strikes, raising the risk of further retaliation. With both sides continuing to exchange attacks, uncertainty surrounding how long the war could last has only grown. War headlines continue to be the most “driving” event on a day to day basis, this is why we’re covering it as part of our “technical analysis.”
As for SPY, Friday’s gap down places it below its 50 DMA, a point which Wall Street and institutional investors view as a “pivotal” level. The focus early next week is whether or not buyers can regain the 50 DMA or not, if not, then the next stop is likely around 730.00.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.