Weekly Stock Market Update & SPY Technical Analysis
Fed Chair Jerome Powell had a mic drop moment last week after his speech sparked an unbelievable rally across the market last week. Powell suggested that The Federal Reserve is ready to shift their policy, reinforcing odds of an interest rate cut in September. The last interest rate cut was in December 2024, making this a long awaiting moment by both consumers and investors.
Why does this matter?
An interest rate cut reduces the cost of borrowing capital, making loans and credit more affordable for both individuals and businesses. This encourages households to spend more, and businesses are incentivized to invest in expansion, hire additional workers, and take on new projects. As spending rises, company revenues grow, fueling broader economic activity. Many firms, especially those in capital intensive or innovative industries (key), rely heavily on affordable borrowing to fund research and development, scale production, or support new hiring. There are some industries and companies that will greatly benefit from falling rates, these stocks will be a big focus of our strategy over the coming months in our Hyper Stocks Pro group..
What to watch for this week:
Earnings from Nvidia are set for Wednesday the 27th after market close. The company is the driving force behind the AI boom, making their numbers and every word they say on earnings highly important. We’ve written a full piece on Nvidia ahead of their earnings, you can review it here.
Nvidia’s dominance in the AI boom positions the company as a true “trendsetter”. Beyond their own performance, their earnings calls often serve as a window into the broader tech landscape. Any comments from leadership could hint at emerging innovations or upcoming advancements, potentially signaling where the next wave of opportunities may arise, not just for Nvidia, but for entire sectors and related stocks…we’ll be watching for these signals.
Also in focus this week:
- Consumer Confidence - Tuesday
- Q2 GDP (Revision) - Thursday
- PCE Index - Friday
- Consumer Sentiment- Friday
The most important report will be Friday’s PCE Index as it will give an update on inflation. Prices have been on the rise in recent months, many blaming tariffs, but the PCE index is expected to stay flat compared to last month at 2.6%. We’ll be updating any critical developments from the economic data throughout the week for our premium members.
SPY Technical Analysis:
SPY touched a new record on Friday, but traders and investors should remain cautious as we end August and start September, historically the highest volatility month. Volatility breeds opportunities but traders need to be strategic in their approach to it. Option prices will increase in high volatility periods, increasing risk. And overextended stocks begin correcting. However the capital leaving overextended names begins moving to other underperforming industries and stocks, something called capital rotation. Our watchlists and daily picks will focus on positioning ourselves early into the receiving sectors.
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 do your own research or consult with a licensed financial advisor before making investment decisions.