A Volatile Week With Modest Overall Gains
The 0.7% returns that the S&P 500 and Nasdaq each posted for the week did not come easily, as stocks sold off on Wednesday before rebounding on Thursday and Friday. The modest overall results left the indexes below the record levels recorded in the first few days of June.
Semiconductors Pull Back After Historic Run
The semiconductor index, which had nearly doubled since the start of the year, pulled back about 12% before partially recovering later in the week. After this historic rally in technology over the past two months, a wobble in semiconductor stocks disrupted the market’s recent calm, triggering a pullback in some of its biggest winners.
Encouragingly, beneath the surface, improving breadth has been signaling a healthier market backdrop, with early signs of rotation and broader participation. Markets have entered the summer in a more volatile but still supportive phase, marked by shifting leadership, a highly anticipated IPO pipeline, and geopolitics coming back into focus.
Small Caps Hit Record Highs
The Russell 2000 small-cap stock index outpaced its large-cap peers by a wide margin, climbing to a record high and extending small caps’ year-to-date performance leadership. The Russell 2000 finished around 4% higher for the week and is now up nearly 19% year to date.
Oil Swings Wildly on Middle East Developments
Oil prices continued to take cues from developments in the Middle East. U.S. crude jumped more than 3% on Wednesday, only to fall on Friday afternoon to the lowest level since mid-April. Oil climbed above $93 per barrel on Wednesday and was trading around $84 on Friday afternoon, down about 6% for the week.
Key SPX Technical Levels to Watch
Support levels at 7,235-45, 7,200, 7,145, and 7,050. Chart resistance appears near 7,485, 7,540, and the 7,590-7,600 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
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