Weekly Stock Market Update & SPY Technical Analysis
Important is an understatement when it comes to describing how this week is for the stock market. Between tech stock earnings, trade deals, and the latest interest rate decision, investors are facing a week filled with new information to digest. If you're in Hyper Stocks Pro, we'll guide you through it day by day in our daily updates.
First, let’s discuss what happened last week:
After weeks of economic data silence due the government shutdown, investors finally received some numbers about the state of inflation. September’s CPI report showed that inflation climbed to 3.0%, surprisingly below the estimates of 3.1%. Although the number is still moving in the wrong direction, the market celebrated the better than expected data and gapped higher to end the week. This is perhaps the positive surprise reinforces chances of a rate cut this week, which we’ll talk about shortly.
Another key update last week and through the week is Trump’s new stance on Canada. The President claimed that Canada used a misleading ad using Ronald Raegan’s voice that highlights the downside of tariffs, and in response the stopped all trade negotiations with Canada and went on to add an additional 10% tariff over the weekend. This is quite important because Canada is the United States’ biggest trading partner when you combined goods and services, outpacing Mexico and China. We imagine that further negotiations will comeback now that Canada stopped running the ad in question.
What’s in focus now:
This week’s attention turns to tech stock earnings and The Fed’s FOMC / interest rate decision.
Microsoft, Google, Meta, Apple, and Amazon will all be reporting earnings through out the week, and since these five giants hold a combined weight ≈ 23% of the S&P 500, the numbers matter A LOT. Luckily, these companies have a long historically of outdoing themselves when it comes to earnings, so we’re going into this week with high confidence that they’ll meet or exceed expectations.
Next up, interest rates. Traders and investors are anticipating two more interest rate cuts before year end as The Federal Reserve continues their rate cut cycle. The Feds started cutting rates again after citing weakness in the U.S. labor market and after inflation cooled from its 2022 highs. When inflation was peaking, The Fed raised rates to control prices, but in doing so, they slowed the housing, credit, and the labor market, now they’re lowering rates to stimulate the economy again.
There are two primary elements that drive markets long term, and those are corporate earnings and interest rates. Corporate earnings are already near record levels, but we’ll find out if they can sustain those levels this week. And interest rates are coming down in favor of growth. The combination of the two reinforce a further market rally, especially with excitement around artificial intelligence and new U.S. investments driving optimism.
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.