Weekly Stock Market Update & SPY Technical Analysis
Major indexes ended flat last week as markets reacted to Nvidia’s earnings and the latest inflation data. It seems like the market has been riding a record high, but hasn’t been able to see a breakout rally or a strong sell-off for weeks, but that’ll likely change this week as investors take action into the new month.
The S&P 500’s climb to record highs has been driven largely by Nvidia and other stocks at the center of the AI boom. Nvidia alone now represents about 8% of the index, making its earnings a key catalyst for market sentiment. While the company once again beat expectations, much of the good news appeared to be priced in beforehand, why may explain the profit taking that followed rather than a rally. With Nvidia’s results now out, market dynamics could shift toward rotation, as investors move capital away from overextended leaders and into lagging names. On the earnings call, Nvidia’s CEO highlighted a range of industries. and even specific companies. set to play pivotal roles in building AI infrastructure. We’ve noted these mentions and will be structuring our Hyper Stocks Pro set-ups around them in the weeks and months ahead.
Apart from Nvidia’s earnings, last week’s inflation data showed that high prices remained sticky in July, with year over year inflation sitting at 2.6%. Core inflation, which excludes food and energy, is at 2.9%. High prices have ravished the consumer in recent years and the impact is expected to be magnified by tariffs. Perhaps why consumer sentiment is sitting at a low of 58.2, 10% below 6 and 12 months ago (per last week’s report).
This week’s spotlight is on the U.S. labor market, where multiple employment reports are due. Expectations are low, with forecasts calling for only 75,000 new jobs in August and a rise in the unemployment rate from 4.2% to 4.3%. Higher interest rates have already been weighing on hiring and driving up layoffs, and the added uncertainty from new tariffs is intensifying the pressure. Investors, businesses, and consumers are all awaiting The Fed’s interest rate decision later this month. The chances of a rate cut are currently at 87%.
SPY Technical Analysis:
During times of capital rotation from overextended names to laggards, we see major indexes like the S&P 500 chop back and forth within a small range. This happens as some names within the index pullback while others gain, but eventually the index itself will breakout or breakdown depending on the largest movers within it. SPY has remained near these record highs for weeks without a proper rally or sell-off, so chances are there’s one coming soon. We’ll be monitoring key levels and updating them every morning in our Hyper Stocks Pro group to prepare for that move.