Weekly Stock Market Update & SPY Technical Analysis
Major indexes like the Nasdaq 100 and the S&P 500 hit new all-time highs last week as traders celebrated a truce between Israel and Iran. The brief conflict is part of a decades-long regional struggle, but this case stands out because the U.S. was directly involved—striking Iran for the first time since 1988. President Trump declared that peace had been achieved following the strike, and markets quickly responded with optimism.
That optimism, however, overshadowed several market red flags, which we are factoring into our strategy moving forward. These warning signs came from recent economic data, including a rise in inflation and weaker-than-expected GDP. Inflation increased by 2.3% year-over-year, slightly above the 2.2% estimate, while Q1 GDP was revised down to -0.5%, worse than the previous -0.2%. These figures reflect the exact conditions that high tariffs were expected to cause—slower growth and higher prices. The Fed has noted this risk in recent meetings, which is part of why Chair Jerome Powell has resisted cutting rates, despite ongoing pressure from Trump. Last week, Trump called Powell “stupid” and hinted he may replace him in August with someone more willing to cut rates before inflation reaches the 2% target.
As we enter a new month, market focus shifts to the health of the U.S. labor market. Key reports are due, with the most important being the unemployment rate, scheduled for release this Thursday at 8:30 AM ET. Expectations point to a slight uptick from 4.2% to 4.3%, which would add to the growing list of economic red flags.
While these signals don’t guarantee a market correction, they do impact our strategy—specifically, which sectors we favor and how we manage risk. It’s important to remember that the stock market is not the economy; it’s driven primarily by corporate earnings and interest rates.
So far this year, earnings have largely exceeded expectations. We’ve focused on trading companies with the strongest results to improve our probability of success. With interest rates expected to ease over the next year, certain stocks stand to benefit more than others—something we’ve factored into our picks. Alongside major advances in artificial intelligence and quantum computing, the broader market appears well-positioned for long-term growth. We’ll continue to monitor these shifts and take advantage of the opportunities they present.
SPY Technical Analysis:
SPY reached a new record high of 616.39 last week before being rejected, making that our resistance level to watch this week. With no historical resistance beyond this point, a breakout would be considered a “blue sky breakout.” While it’s difficult to set exact price targets at these levels, options market data suggests a potential move of (+/-) \$25 by August 1st. That implies SPY could be setting up for a move toward 640–645. We’ll adjust our approach based on daily developments and sending real time updates to our premium group.