Weekly Stock Market Update & SPY Technical Analysis
The S&P 500 and Nasdaq 100 reached new record highs again last week but retreated on Friday following a new tariff announcement on Canada. Over the weekend, Trump also announced tariffs on Mexico and the European Union, likely out of frustration that his July 9th trade deal deadline couldn’t be met. All of these new tariffs are set to take effect on August 1st, the new deadline implemented by the Trump administration.
The market had been riding high going into last week in anticipation of finalized trade deals, but these new developments reintroduced uncertainty for investors. Even the expectation that “peace” between Israel and Iran had been achieved is now back in question as ceasefire talks stall. In reality, while these are short-term headwinds for the market, they likely won’t have a significant long-term impact. What matters most, and perhaps the reason investors took profits late last week, is the start of earnings season.
Companies will begin reporting earnings this week, with bank and financial stocks kicking things off alongside notable names like ASML, TSM, and NFLX. Bank earnings are especially important because they represent the backbone of the financial system, and the performance of investment banking can signal overall business strength or weakness. Meanwhile, earnings from ASML and TSM should provide insight into how semiconductors performed last quarter, especially with TSM being the primary manufacturer of Nvidia’s and AMD’s most advanced chips. Nvidia just hit new all-time highs and became the first company to reach a $4 trillion market cap, so TSM’s earnings need to be strong to support Nvidia’s valuation. Weak results could prompt profit taking across the semiconductor sector.
Earnings aren't the only point of focus this week. Investors are also paying attention to key inflation data, additional reports from the Federal Reserve, U.S. retail sales, and consumer sentiment.
- Consumer Price Index (Tue)
- Producer Price Index (Wed)
- Fed Beige Book (Wed)
- U.S. Retail Sales (Thu)
- Consumer Sentiment (Fri)
The Consumer and Producer Price Index reports will be critical in assessing how tariffs are affecting prices. The last reading showed a rise in inflation, and current forecasts suggest an increase from 2.4% to 2.7%. If accurate, this trend could challenge expectations for a rate cut later this year and serve as a wake-up call for the markets.
U.S. retail sales and consumer sentiment data will offer crucial insight into how Americans are feeling and spending. Weak spending and low sentiment could point to disappointing retail earnings ahead. Since consumer spending makes up 70% of U.S. GDP, it remains the most important driver of economic growth. With last quarter’s GDP already showing signs of contraction, investors are closely watching for any signs of a rebound in consumer confidence. We’ll be updating the outcomes of these reports in our morning updates this week.
SPY Technical Analysis:
SPY has been making new records for about three consecutive weeks, which is great for investors, but a rally without any pullbacks can often feel unsustainable. The chart is in need of relief, and that may come this week as markets digest the events mentioned above. The strongest support we see from current highs is around 615.00, which buyers may try to defend if the index pulls back. Even if that level breaks, 605.00 is another bullish level that could act as support. If earnings and economic data are strong, the index could quickly reverse to retest its all time high of 626.87. We’ll continue updating our price targets and key levels as the market evolves throughout the week.