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
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