The S&P 500 closed down 1.5% overnight, while the Dow dived more than 1100-points delivering its worst session since “Liberation Day” more than a year ago. It sounds dramatic but the chart below shows the market remains in the same relatively tight trading range of the last 3-months. Strong comments from Fed Chair sent US 30-year bond yields to their highest level since the GFC in 2007:
- “I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act,” Warsh said during his press conference.
Adding to overnight inflation concerns, oil prices surged ~8% after President Donald Trump told Fox News the US would hit Iran “hard” in response to surprise attacks on American troops in the Middle East – the saga continues. The semiconductor selloff also intensified, with the iShares Semiconductor ETF (SOXX) falling -5.5% for a fifth consecutive decline. Micron (-10%), AMD (-5.5%) and KLA (10%) all endured tough sessions. Interestingly, the money coming out of Semi’s is starting to end up in some of the software names, which mostly traded higher overnight.
Importantly, reporting season in the US remains solid, with 64% of the S&P 500 companies having reported Q2 2026 results; the EPS beat rate is ~67% and revenue beat rate ~80%. For the bulls, the best risk/reward “Buy Signal” would be generated by a test of 7200 and subsequent reversal back above 7300.
- We can see further choppy trading in the coming weeks, but ultimately until further notice it’s simply a period of consolidation.
MM remains bullish towards US stocks into Christmas
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