Weekly Stock Market Update & SPY Technical Analysis
Over the weekend, the U.S. and Israel launched a strategic attack on Iran, targeting the country’s top military commanders, important insiders, and leaders. The U.S. and Iran held talks to have a peaceful resolution just last week, but Iran’s leadership pushed back on the demands of Israel and the United States, which included:
- Permanently end all uranium enrichment (this stops Iran from producing nuclear weapons)
- Accept strict limits on its ballistic missile program
- Completely halt support for regional proxy extremist groups
These demands were presents as conditions for avoiding military action and as part of negotiations…when Iran pushed back, the U.S. didn’t hold back. The country’s multi-decade supreme leader was killed in a swift operation, upending a regime that has dominated the country since 1989.
While we usually don’t focus on politics, politics often influence markets. The president and presidential party of the U.S. have an agenda, it’s the companies that fulfill that agenda that usually see the biggest gains under that period. Since Trump took office, we initially saw strong support for AI and advanced technology initiatives, which helped fuel continued momentum in the sector. However, this year’s dominant theme has shifted toward industrials and energy. On the industrial side, rising global defense budgets have driven renewed interest in major defense contractors like $LMT, $NOC, and $BA. At the same time, energy markets have responded to geopolitical moves, including policy shifts involving Venezuela, benefiting companies such as $CVX, $XOM, and $VLO.
This latest move on Iran has already pushed oil prices higher, which we’ll likely see reflect in oil stocks this week…watch the $XLE ETF to track the industry. We’re already in a few oil stocks ahead of the weekend, but we included more in our weekly watchlist to take on as buyers drive prices higher. As for defense contractors, many of the popular names are already overextended, but we do have some small / mid-cap stocks that we’re also tracking for more highs this quarter.
Economic calendar this week:
- S&P final U.S. manufacturing PMI (Mon)
- ADP employment report (Wed)
- Fed Beige Book (Wed)
- U.S. unemployment rate (Fri)
This week’s key economic focus is the U.S. labor market, where job growth is expected to come in at just 54,000 for last month. The labor market has been a big concern in recent times as hiring slows and AI threatens jobs, but despite the concerns, unemployment is still near a historic low at 4.4%.
We’ll be covering all economic data and reports in our daily morning updates. Join Hyper Stocks Pro for access.
The market often surprises us when it comes to how it reacts to breaking news. At times, the initial knee-jerk reaction to a war driven headline is negative, but the market turns around and rallies. We want to make sure we don’t “jump the gun” this week and allow markets to digest the news of the weekend before making any big moves. We’ve already been structuring our holdings to prepare for this weekend’s events, and our watchlist is also focused on quality names to buy on any dip.