The major indexes showed resilience last week. The Nasdaq Composite eked out a 0.3% gain on Friday, powering to a 1.7% weekly rise. It’s now sitting comfortably above its 50-day line and short-term moving averages, even if its July performance remains a modest 0.3% against a strong 13.1% gain for the year.
The S&P 500 led the pack on Friday, climbing 0.4% and logging its second consecutive weekly gain of 1.2%. While it didn’t test the same 50-day support levels as the Nasdaq, it holds a solid 1% gain for July and a 10.7% return year-to-date.
The Dow Jones Industrial Average also added 0.3% on Friday, though it couldn’t quite shake off a 0.5% dip for the week.
Last Friday, the robust U.S. debut of SK Hynix (SKHYV) set a positive tone, while Nvidia helped anchor the S&P 500 with a 4% jump.
Meta Platforms was the undeniable star, surging 6% on Friday to cap off a 15% weekly rally—its best performance since early 2024. The excitement follows a Bank of America buy rating and reports of improved AI cost structures, alongside a positive reception for the debut of their Muse Spark 1.1 model.
The 10-year Treasury yield ticked up to 4.56%.
Oil prices rose sharply mid-week as the U.S. and Iran exchanged air strikes, renewing fears that oil flows through the Strait of Hormuz could be disrupted again. Because communication between the two warring factions continued, oil came back down towards the end of the week, settling at $71.54 per barrel.
This week, we face Congressional testimony from Federal Reserve Chairman Kevin Warsh. Investors will be hanging on his every word regarding the future of interest rates and his potential plans for institutional reform.
Economic data that investors can expect include industrial production and consumer sentiment. On Tuesday: June Consumer Price Index (CPI).Wednesday: Producer Price Index (PPI), and Thursday: Retail sales data.
Finally, the new earnings season kicks off in earnest. This is my favorite time because stocks will react, sometimes violently, which creates entry opportunities.
We’ll be watching closely as big banks like Goldman Sachs (GS) and JPMorgan Chase (JPM) report. They are joined by key tech and semiconductor players ASML (ASML) and Taiwan Semiconductor (TSM).
Please click here for the Looking Ahead report from the Wells Fargo Investment Institute. Below are excerpts from that research.
Week in review: July 6 – 10
Economic news
- The ISM services PMI fell to 54.0 in June, down from the previous month’s 54.5, in-line with expectations.
- The headline reading declined amid slower activity in new orders.
- The employment index rose 3.3 points to 51.2, marking its largest increase since 2024.
- The U.S. trade deficit grew 42.4% month-over-month (M/M) in May to $77.6 billion as the gap in broad-based import and export activity widened.
- The gap was driven by a 3.3% (M/M) rise in imports, possibly reflecting stronger demand for goods ahead of additional tariffs, while exports fell by 3.2% (M/M) amid a decline in nonmonetary gold.
- The minutes from the June FOMC meeting indicated that policymakers were divided on the path of interest rate hikes through the end of 2026. Geopolitical tensions continue to weigh on Fed committee members, amid rising energy prices and tariff-related disruptions.
- The FOMC voted unanimously to hold the federal funds rate at 3.5% to 3.75% amid persistent inflation pressures. Nine officials projected at least one 1/4 point hike, with six anticipating at least two.
- According to the minutes, “some policy firming would likely be warranted,” as inflation remains elevated above the 2% target rate for a fifth consecutive year. Meanwhile, labor market concerns have cooled.
- Mortgage Bankers Association mortgage applications fell 2.2% in the week ended July 3, coupled with 30-year mortgage rates rising to 6.49%.
- Existing home sales fell 2.4% M/M to an annualized rate of 4.09 million units, below consensus expectations.
- Prolonged high mortgage rates continue to weigh on the U.S. housing market, reducing affordability for homebuyers. Additionally, median sales price of existing homes rose 1.8% Y/Y to a record of 440,600, further reducing affordability.
Looking Ahead to this week: July 13 – July 17
U.S.
- The highlights will be updates on inflation, CPI, PPI, and Import Price Index.
- Chairman Warsh will deliver the Fed’s semi-annual testimony before the House Finance Services Committee on Tuesday and the Senate Banking Committee on Wednesday.
- Other potentially market moving releases include the Fed’s Beige Book, June retail sales, and July consumer sentiment and inflation expectations survey from the University of Michigan.
- Also on tap: May’s business inventories; June industrial production, federal budget balance, and small business optimism; measures of July economic activity from the New York and Philadelphia regional Fed banks.
- Rounding out the docket is a flurry of housing market data, including July homebuilder sentiment, and June’s pending home sales, housing starts, and preliminary building permits.
Asia
- In China, the focus will be on Q2 Gross Domestic Product (GDP), in addition June’s industrial production, trade balance, retail sales, fixed asset investment, jobless rate, and home prices.
- From Japan, look for May’s core machine orders, finalized industrial production, and the Tertiary (services) Industry Index, along with June’s department store sales.
- The Bank of Korea will hold a policy meeting, while South Korean economic releases include June’s Export Price Index and unemployment rate.
- Australia’s June business confidence, and July consumer confidence hit the tape.
Europe
- Highlights include the Eurozone’s May trade balance and industrial production, and then finalized June CPI.
- U.K. releases include May GDP, industrial production, Index of Services, construction output, and trade balance.
