July 10, 2026

The major averages closed out a volatile week mixed as investors absorbed escalating tensions between the US and Iran and dramatic daily swings in semiconductor stocks. Equities rode a rebound in tech shares to open the period with semiconductors outperforming, led by a +6.61% spike in Advanced Micro Devices (AMD) after Goldman Sachs (GS) raised its price target, while Broadcom (AVGO) jumped on expanding its chip-making agreement with Apple (AAPL). The DJIA closed above 53k for the first time posting a new record high. Despite a blowout quarter from Samsung, AI-related and semiconductor stocks tumbled on Tuesday with the Philadelphia Semiconductor Index (SOX) sinking -4.65%. Oil prices and yields nudged higher after the US revoked waivers allowing the sale of Iranian oil following skirmishes in the Strait of Hormuz. Global markets moved lower as the White House called off the fragile ceasefire between the US and Iran midweek that sent crude oil prices up to $75.84 a barrel before closing the period at $71.60. Also weighing on equities was a more hawkish tone in the FOMC Meeting minutes that revealed a divided committee that expected commodity prices to remain elevated longer than previously anticipated. Yields were higher on the week with the rate on the 10-year Treasury landing at 4.566%. Investors downplayed new strikes on Iran by the US on Thursday as an opening dip was bought sending the different indexes higher. The major averages traded higher again on Friday with 10 of 11 sectors higher. The back-and-forth trading during the period ended with the Dow Jones lower, snapping a four-week win streak, while the S&P 500 and NASDAQ advanced for a second straight week and the fourth positive period over the last five. Looking ahead, second quarter earnings season will be the focus next week with the Money Center Banks reporting on Tuesday with key inflation data in the CPI and PPI out midweek.

For the period, the DJIA lost 263.06 points (-0.5%) and settled at 52637.01. The S&P 500 tacked on 92.15 points (+1.2%) and closed at 7575.39. The NASDAQ gained 448.94 points (+1.7%), finishing at 26281.61. The small cap Russell 2000 slipped 18.30 points (-0.6%) and settled at 2977.81.

Market Outlook:The technical condition of the market remains mixed with the Dow Jones, NYSE and Equal-weight S&P 500 (RSP) hitting new record highs during the week, before the different indexes finished the period mixed. The NASDAQ, NASDAQ 100 and Philadelphia Semiconductor Index (SOX) are back above their respective 50-day MA after wavering on both sides of this support/resistance level over the last few weeks. Those indexes have been trading in a narrowing triangle chart pattern since the first of June and seem to have resolved this pattern to the upside, which points to a possible fresh leg up as Q2 earnings get underway. A rotation out of technology stocks and into cyclical areas of the market has allowed the DJIA and small cap Russell 2000 to outperform recently, but both indexes saw deterioration in their technical indicators this week with slowing upside momentum as the Technology (XLK) sector, getting a boost from renewed strength in AI-related stocks and semiconductors, helped the NASDAQ outperform. Despite the bounce in the NASDAQ, its technical indicators finished the period in neutral ground, but were crossing into bullish territory as the week ended. The S&P 500 had a bullish cross in short-term trend gauge MACD, while Momentum, as measured by the 14-day RSI, nudged into bullish ground.

Energy (XLE) was the leading sector this week on rising oil prices, followed by Technology (XLK) and Communication Services (XLC) as overweighted big cap tech and the MAG 7 saw renewed buying. However, six of 11 sectors closed in the red. Materials (XLB), Healthcare (XLV), Industrial (XLI) and Consumer Staples (XLP) were all down between 1-2%. On the plus side, Financial (XLF), Healthcare (XLV) and Industrial (XLI) sectors punched new record highs early in the week. Except for Communication Services (XLC), which saw marked improvement during the period on a spike in Meta Platforms (META), but remains below its 50, 100 and 200-day MA, the other market groups seem to be range bound and haven't been able to make much progress since early June. Market Edge Second Opinion has five of 11 sectors rated Long.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI):The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times. 

Currently, the CTI is Negative at -13, unchanged from the previous week. Cycles A, B, C, D and E are bearish. The negative CTI configuration is projected to remain in place through July.

Momentum Index (MI):The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish. 

The Momentum Index is Negative at -6, down two notches from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line lost 9 units while the number of new 52-week highs exceeded the number of new lows on four sessions. Breadth was also mixed at the NASDAQ as the A/D line fell 606 units while the number of new highs out did the new lows on three of the four days. Finally, the percentage of stocks above their 50-day moving average eased to 56.2% vs. 56.3% the previous week, while those above their 200-day moving average increased to 59.5% vs. 59.2% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was mixed. The NYSE Advance/Decline Line, a leading indicator of market direction, hit a new high on Monday but along with the NASDAQ A/D Line finished the period slightly  lower. There was sharp contraction in the number of new 52-week highs in both the NYSE and the NASDAQ, but the number of new lows were fairly contained showing the down days have been orderly.

Sentiment Index (SI):Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Negative at -4, down two notches from the previous week.

Investors downplayed the skirmishes between the US and Iran and Investor Sentiment was little changed. The American Association of Individual Investors (AAII) survey saw an uptick in retail bulls to 36.3%, just a touch below the historical average of 37.5%. The National Association of Active Investment Managers (NAAIM) Exposure Index eased to 83.0%, but down from 98.6% two weeks ago. The Percentage of Bullish and Bearish Investment Advisors were little changed but the ratio between the Bulls & Bears is 3.1:1, which is a bearish condition.

Market Posture:Based on the status of the Market Edge market timing models, the Market Posture is Bearish as of the week ending 05/15/2026 (DJIA - 50,579.70). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Segment Rankings:What's Hot (69) - What's Not (93): The following are the strongest and weakest Industry Segments for the period ending 7/09/26. Strongest: Business Communication Services, Mobile Devices, Security Software & Systems and Health Insurance. Weakest: Pulp & Paper Products, Wireline Communications, Gold and Confectioners. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center:The top performing ETF categories for the week ending 7/09/26 were: Sector-Energy (+4.25%), Commodity-Blend (+4.20%), Commodity-Energy (+4.07%), Commodity-Agriculture (+3.16%) and Specialty Health (+2.67%). The weakest categories were: Sector-Alternative Energy (-4.99%), Specialty Technology (-3.34%), Specialty Real Estate (-2.01%), Blend-Small Cap (-1.64%) and Growth-Mid Cap (-1.60%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT