A Difficult Week as Stocks Alternate Between Gains and Losses

The S&P 500 finished 1.3% lower for the week and the Nasdaq dropped more than 2%, extending a pattern of alternating gains and losses that dates to early June when both indexes set record highs. Energy led all sectors with a 3.8% gain while utilities added 2.4%. Year to date gains were pared back to 10.15% for the Nasdaq and 9.6% for the S&P 500, though the small-cap Russell 2000 remains above 20% for the year.

Escalation in the Middle East conflict and further shipping disruptions in the Persian Gulf and Red Sea sent oil surging to around $90 per barrel on Friday, up from roughly $82 the previous week and $69 as recently as early July. Precious metals were firm, with silver leading the way at 4.6%, gold up 1.3%, and copper gaining 1%. Bitcoin finished near $64,500, off less than half a percent.

Prices of U.S. government bonds fell for the second week in a row ahead of a Federal Reserve meeting, pushing the 10-year Treasury yield to a peak of 4.70% on Thursday, the highest level in more than 18 months, before closing at 4.68% on Friday.

Critical Support Tests Arrive Early Next Week

The S&P 500 finished the week right on key chart support and faces an important test heading into Monday. Support sits at 7,375-80, 7,235-40, and 7,050. Resistance appears near 7,460-80, 7,520-25, and the 7,620-7,680 zone at the all-time high set nearly seven weeks ago on June 2nd.

The Nasdaq 100 closed at 28,128, its lowest close since May 5th, finishing slightly under key chart support. A break below that level could put 27,500 and 26,875 in play.

Despite the surface-level damage, the McClellan Oscillator sits at a fairly neutral -20, reflecting the fact that recent selling has been concentrated in tech rather than broadly spread across the market.

The oscillator would need to reach the -150 to -200 zone to signal a more severely oversold condition and the possibility of an important technical rebound. However, several other oscillator readings and DeMark counts are signaling a possible short-term bottom and pending bounce near here rather than an immediate breakdown.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

— HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com

Indexes Post Back-to-Back Weekly Gains

Last week the S&P 500 finished more than 1% higher and the Nasdaq added nearly 2% as the indexes recorded their second positive week in a row.

AI Sectors Fade While a Quiet Rotation Takes Shape Within Tech

At the sector level, AI-driven sectors like technology have underperformed while more cyclical and defensive areas have held up better. This has been the case not only over the last week but since early June.

The parts of the market that had the sharpest rallies earlier this year, including semiconductor stocks, have seen the biggest pullbacks as well. This is not too surprising, given that parabolic moves in the market tend not to be sustainable, as there is some natural profit-taking and consolidation that brings these sub-sectors down again. Keep in mind however that despite the recent pullback and rotation, many of these sectors are still up for the year. The SOX Semiconductor index is down about 20% from its June highs but is still higher by around 64% for the year.

Within the technology sector, we are also seeing a rotation. The semiconductor and hardware parts of tech are lagging, while the software and cloud sectors seem to be recovering. Names like Microsoft and Salesforce are rebounding while AI infrastructure stocks are lagging.

Oil Climbs on Middle East Escalation as Volatility and Small Caps Tell Their Own Story

Oil prices jumped on Tuesday and Wednesday as an escalation in the Middle East conflict reinforced the fragility of the U.S.-Iran ceasefire agreement. The price of U.S. crude briefly climbed to about $76 per barrel on Wednesday before pulling back to around $71 by Friday afternoon.

The VIX fell for the second week in a row, slipping to its lowest level in more than six months, finishing the week at 15.0, down from a recent high of 22.2 reached on June 10. Meanwhile a U.S. small-cap index lagged its large-cap peer by a wide margin for the week, eroding small caps’ year-to-date outperformance. The Russell 2000 Index fell 0.6% for the week while its large-cap counterpart ended 1.26% higher.

Key SPX Technical Levels to Watch

Support near 7,420-30, 7,320-25, 7,235, and 7,040-50. A strong downside move might even violate 7,000 and reach the 6,750-6,800 zone. Resistance appears at 7,575-80 and 7,620. A break to new highs could accelerate to around 7,850.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

— HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com

A Second Consecutive Week of Gains

The S&P 500 finished more than 1% higher and the Nasdaq added nearly 2% as the indexes recorded their second positive week in a row. The S&P 500 finished just a half percentage point below the record it set on June 2. The Nasdaq was more than 3% below the record it set on the same date.

The major U.S. small-cap index lagged its large-cap peer by a wide margin for the week, eroding small caps’ year-to-date outperformance. The Russell 2000 Index fell 0.6% for the week while its large-cap counterpart ended 1.0% higher.

Oil Jumps on Middle East Escalation

Oil prices jumped on Tuesday and Wednesday as an escalation in the Middle East conflict reinforced the fragility of the U.S.-Iran ceasefire agreement. The price of U.S. crude briefly climbed to about $76 per barrel on Wednesday before pulling back to around $71 by Friday afternoon. Crude oil had reached as low as $67.04 in March, the week before the war in Iran began.

An index that tracks investors’ expectations of short-term U.S. stock market volatility fell for the second week in a row, slipping to its lowest level in more than six months. The Cboe Volatility Index finished the week at 15.0, down from a recent high of 22.2 reached on June 10.

Semiconductors Post Their Best Quarter on Record

The U.S. semiconductor index just wrapped up its best quarter on record, gaining 88%. However, the third quarter began with a pullback across the sector. The high-flying KOSPI, the Korean index that at one point had doubled this year, has since declined 20% from its peak, entering bear market territory. The index is heavily weighted toward Samsung and SK Hynix, which together account for nearly 55% of its composition, amplifying moves in both directions.

Key SPX Technical Levels to Watch

Resistance near 7,620, 7,750, and 7,900. In my view it is possible we may eventually see 8,000 and above. Key chart support sits near 7,500-08, 7,420-25, and 7,320-25. A violation of 7,290-95 would be quite negative and could lead to a sharp drop to test 7,000 or lower.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

— HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com

Stocks Rally on AI Sentiment Shift But the Next Few Sessions Could Be Decisive

Last week the latest turn in shifting sentiment about AI and semiconductor prospects lifted the major U.S. stock indexes, as each finished around 2% higher for the week on Thursday before Friday’s pre-holiday market closure. The Dow climbed to a record high, while the S&P 500 and the Nasdaq still remain below the peak levels they recorded on June 2.

Best Quarter Since 2020 Now in the Books

As the second quarter concluded on Tuesday, the Nasdaq ended up more than 21% higher for the three-month period while the S&P 500 climbed nearly 15%, the biggest quarterly gains for both indexes since 2020. The Dow added 13%, its best quarter since 2022. The results marked a sharp shift from this year’s first quarter, when the indexes sustained their largest quarterly declines in nearly four years.

Oil Extends Its Decline Into July

The price of oil fell at the start of July, extending the previous month’s 20% decline. U.S. crude was trading around $68 per barrel on Thursday afternoon, well below the commodity’s $87-plus level at the end of May. Thursday’s price was roughly in line with oil’s level in late February, before the Middle East conflict escalated.

Bitcoin and Gold Struggle to Recover

The price of Bitcoin climbed on the first two trading days of July, but the modest gains did not come close to offsetting its sharp decline in June. The price dropped by more than 20% in June, ending the month below $59,000 after closing out May at nearly $74,000.

A modest weekly gain for gold did little to soften the precious metal’s sharp decline from a record high set more than five months ago. Gold was trading around $4,140 on Thursday, well below its peak of more than $5,500 reached in late January and down from around $4,800 as recently as mid-April.

My Technical Read: Nine Weeks of Consolidation — or a Top?

From an overall perspective the S&P 500 has now spent about nine weeks in a pattern that may be construed as either a consolidation or a topping pattern, and is near a point where I believe it may be ready to make a more distinct directional move.

The next few sessions may very well reveal what the market’s intentions are.

Key SPX Technical Levels to Watch

Support near 7,290-7,300, 7,235-50, and 7,050. Resistance at 7,540-75, 7,620, 7,750, and the 7,900-8,000 zone.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

— HARRY BOXER, THE TECHNICAL TRADER | www.thetechtrader.com

Sharply Divergent Weekly Returns Across the Indexes

A renewed selloff in technology stocks featured the action last week. Shares of semiconductor stocks fell, and several traditionally defensive sectors outperformed, leading to sharply divergent weekly returns across U.S. indexes. The Dow finished 0.6% higher, the Nasdaq dropped 4.6%, and the S&P 500 ended 2.0% lower. For the S&P 500, it was just the second negative result out of the past 13 weeks.

Although the S&P 500 dropped about 2% for the week, notching five straight days of declines, market breadth was positive, as advancing shares frequently outnumbered decliners. This could be setting up a positive internal divergence signaling a possible impending rally.

Growth Versus Value Gap Widens

An index of U.S. large-cap growth stocks lagged its value counterpart by a wide margin last week, widening value’s year-to-date outperformance. The growth index ended 3.2% lower for the week while the value index posted a 0.2% gain. Year to date, the growth index was up just 0.1% versus a 14.4% gain for its value peer.

Meanwhile, the post-IPO exuberance around SpaceX appears to be fading, with shares now down 25% from their peak.

WTI crude oil is trading below $70 per barrel, down nearly $25 from this time last month and over $40 since its 2026 peak. Prices are still above levels seen before the U.S.-Iran conflict, but much of the spike has now reversed.

The price of the most widely traded cryptocurrency briefly fell below $59,000 on Thursday, the lowest level since September 2024. As of Friday afternoon, Bitcoin had recovered some of its latest losses and was trading around $60,000. The cryptocurrency remained well below a recent peak of around $82,000 reached on May 10 and a record high of $126,000 set last October.

Key SPX Technical Levels to Watch

Support near 7,235-50, 7,115, and 7,050. Resistance at 7,425-30, 7,530, and 7,577.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

A Volatile Holiday-Shortened Week With a Lot to Unpack

Stocks logged modest weekly gains in a volatile, holiday-shortened period, heavily shaped by a hawkish Federal Reserve decision and easing geopolitical tensions in the Middle East. Of the major indexes, the Nasdaq Composite performed best, advancing 2.43%, followed by the Russell 2000 and S&P 500 indexes, which added 1.21% and 0.93%, respectively. The Russell 2000 Index is now up 19% year to date.

Oil Crashes on the U.S.-Iran Peace Deal

Crude oil tumbled nearly 40% from its conflict peak, dropping to its lowest levels since March. The sharp decline was triggered by a U.S.-Iran peace deal that effectively reopens shipping through the Strait of Hormuz and restores massive energy supply to the market.

Gold and Crypto Navigate Mixed Signals

Gold saw turbulence, initially dropping on eased geopolitical concerns before finding temporary support as lower oil prices subdued broader inflation expectations. Cryptocurrencies experienced mild volatility, with Bitcoin generally range-bound. Prices slipped mid-week in response to the Fed’s hawkish posturing and broader market risk-off behavior, though risk assets attempted to stabilize late in the week.

Volatility Swings Sharply Before Settling

An indicator that tracks investors’ expectations of short-term U.S. stock market volatility traded in a wide range, reflecting shifts in the outlook for the Middle East conflict. On Wednesday the Cboe Volatility Index closed at the highest level since April 7. By Friday’s close, however, the VIX was trading nearly 18% below the previous week’s closing level.

The Fed Takes a Hawkish Turn

The FOMC held the federal funds rate steady but took a decidedly more hawkish tone. Updated economic projections removed the previously anticipated rate cuts and showed about half of policymakers leaning toward at least one rate hike later this year. This is a meaningful shift in the policy backdrop that traders need to factor into their positioning.

Key SPX Technical Levels to Watch

SPX support sits near 7,385-7,400, 7,250-60, and 7,020-30. Key chart resistance levels appear near 7,575 and 7,620.

In any case, as we always do at TheTechTrader.com, we will “Trade What We See, Not What We Think.”

HARRY BOXER, THE TECHNICAL TRADER