ETF Tracker StatSheet
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STOCKS STAY RESILIENT AS MARKETS LOOK PAST GEOPOLITICAL NOISE
- Moving the market
Stocks took a breather early in the session following Thursday’s strong rally, but the major indexes still managed to grind their way to a modest gain by the close.
That keeps the S&P 500 on track for a nearly 1% gain this week, while the Nasdaq is pacing for a gain of more than 1%. The Dow has lagged somewhat, though it’s only modestly lower for the week.
Much of the recent strength has been fueled by easing concerns over the Middle East. Markets welcomed lower oil prices after reports that diplomatic efforts are underway to bring the U.S. and Iran back to the negotiating table.
Interestingly, traders have largely looked past the latest flare-up in tensions, suggesting that Wall Street remains more focused on economic fundamentals and corporate earnings than geopolitical headlines.
Technology stocks, particularly chipmakers, continue to provide leadership for the broader market. Optimism remains high that strong earnings growth and continued AI-related spending can support further gains and eventually broaden the rally beyond the tech sector.
One potential complication emerged from the latest inflation data. Core PCE inflation came in hotter than expected, with rising memory-chip prices playing a role.
That could make it harder for the Federal Reserve to justify near-term rate cuts, especially as surging data center demand continues to put upward pressure on certain technology-related costs.
Despite those concerns, the major indexes still closed slightly higher, while bond yields finished little changed.
In other markets, metals drifted modestly lower, although copper bucked the trend and finished in positive territory. Bitcoin also held firm, ending the day just shy of the $64,000 level.
Meanwhile, oil prices fell for a third straight session as traders appeared confident that the latest U.S.-Iran military tensions will remain short-lived.
That confidence seems somewhat at odds with President Trump’s recent statement that “the ceasefire is over,” highlighting the gap between geopolitical rhetoric and the market’s relatively calm outlook.
With stocks continuing to shrug off geopolitical risks and inflation concerns, will strong earnings momentum be enough to push the market to fresh highs?
2. Current domestic “Buy” Cycle (effective 5/20/2025); International “Buy” Cycle (effective 5/8/25)
Our domestic bullish cycle that began on November 21, 2023, concluded on April 3, 2025, following a market downturn triggered by President Trump’s tariff policy announcement.
This development caused significant declines across major indexes and broader market indices. However, markets subsequently rebounded, culminating in a new domestic “Buy” signal taking effect May 20, 2025.
Concurrently, our International Trend Tracking Index (TTI) experienced parallel volatility. On April 4, 2025, it breached critical thresholds, prompting a “Sell” recommendation. This position reversed as global markets recovered, with the International TTI regaining sufficient momentum to issue a new “Buy” signal effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
The market got off to a slow start, but buyers quickly took advantage of the dip and pushed the major indexes to a green finish.
The metals sector largely missed out on the rally, though copper managed to buck the trend.
Our TTIs went sideways, with both indicators remaining solidly above their respective trend lines.
This is how we closed 07/10/2026:
Domestic TTI: +8.59% above its M/A (prior close +8.63%)—Buy signal effective 5/20/25.
International TTI: +6.67% above its M/A (prior close +6.71%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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