S&P 500 Daily Update for Wednesday July 2, 2025

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Market Summary for Tuesday, July 1, 2025
Outlook for Wednesday, July 2, 2025
Tuesday Market Recap:
Broad Market Performance: The broader market performed well, but mega-cap and growth stocks took a significant hit, leading to a slight decline in the S&P 500 by 0.11%. This was likely attributed to repositioning at the start of the month and quarter, with money flowing into other market areas.
Market Movements: The S&P 500 opened lower, climbed above the daily pivot (6198), hit resistance at 6200, dipped to S1 (6182), and closed just below 6200 at the daily pivot. Volume was above average due to new quarter inflows from hedge funds and money managers.
Technical Indicators: A golden cross formed in the S&P 500 and SPY ETF, signaling a bullish intermediate to long-term trend. However, short and intermediate-term indicators (e.g., StochRSI, Stochastic, CCI) showing overextension, suggesting potential caution. The equal-weighted S&P outperformed, indicating broader market participation.
Sector Performance: Growth stocks fell over 1%, while value stocks rose over 1%. Defensive sectors (e.g., healthcare, staples, materials) outperformed, with materials being the strongest. Mega-caps including Tesla (-5%), NVIDIA (-3%), and Netflix (-3.4%) underperformed, while financials and banks rose significantly (+2.89% for the Bank ETF).
Economic Data:
ISM Manufacturing: Improved to 49 (from 48.5), still indicating contraction but better than expected.
Construction Spending: Down 0.3% month-over-month (worse than -0.2% expected), with private construction was down 0.5% and public construction was up 0.1%.
JOLTS Job Openings: Rose to 7.769M (from 7.395M), signaling labor market strength.
Other Factors:
The Senate passed a modified version of the BBB, returning it to the House for further debate, with a potential vote on Wednesday. Controversy surrounds the bill’s size and spending implications.
Fed Chair Powell noted that tariffs delayed rate cuts, though their impact is debated. President Trump’s comments suggested no extension of paused tariffs (set to resume July 9) and potential trade tensions with Japan.
The dollar weakened to the 96 range, benefiting domestic markets. The 10-year yield rose to 4.25%.
Wednesday Outlook:
Market Trends: The S&P 500 remains in a positive trend across all timeframes, supported by the recent golden cross. However, weak seasonality in early July (post-election year) and overextended indicators suggest potential short-term weakness.
Key Events:
Economic Data: MBA Mortgage Applications, ADP Non-Farm Employment Change.
Geopolitical Risks: Monitor Iran-Israel tensions, domestic protests, and developments around the major bill.
Thursday Preview: Major employment report, initial/continuing jobless claims, and ISM Non-Manufacturing Index (markets closed Friday for July 4).
Seasonality: Historical data shows weakness in early July, with potential strength mid-month. Post-election years have been strong, with July up 12/18 times since 1950 (average return +2.2%).
Technical Outlook: Watch for continued broad market participation vs. mega-cap weakness. Pivot points for Wednesday will guide intraday levels. Growth-to-value ratios should be watched for a potential shift to defensive stocks, but it’s unclear if this is a one-day event or a trend.
Conclusion: The S&P 500 remains bullish, but mega-cap underperformance and overextended indicators warrant caution. Wednesday’s economic data and bill developments could drive volatility. The trend is positive, with a golden cross reinforcing optimism, but seasonality and geopolitical risks may temper near-term gains.

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!