Stocks flat on Monday, ahead of the busy news week

07/29/25

Stocks were mostly flat and mixed on Monday, and a late rally took the S&P 500 just barely into positive territory to secure its sixth straight positive close. Small caps lagged posting a modest loss for the S-fund, and the I-fund took a hard hit after a big rally in the dollar. It's a long busy week for the market so don't get too comfortable.

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The trade deal was a win for the US, but stocks didn't react that way as it may have been an excuse to take profits (sell the news.) The trade deal with China may not go as easily, but we've been surprised before.

The market has been overdue for some kind of pullback, but even an internal mess yesterday couldn't stop the winning streak for the S&P 500.

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The bulls may not be done, but we will have a plethora of headlines this week that could cause some volatility. With the VIX near 15, near the lows of 2025, we're probably due for a little spike in volatility. The Volatility Index (VIX):

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The S&P 500 (C-fund) continues to roll along, again with little volatility, as the grind higher has been slow and steady for months. Quiet is good for the bulls. It's a matter of how long it can last and how long before that VIX has its next tantrum?

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ACWX (I-fund) did experience some volatility yesterday after the EU trade deal announcement as the dollar spiked higher, and that sent the I-fund down 1.3%. A gap was filled (blue box) during the sell off, and there's some support near yesterday's close.

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A follow up on the price of oil and the dollar. The action yesterday couldn't have mocked my analysis anymore. I said, "A rising dollar could also send oil prices lower and this chart suggests a break below $65 a barrel could mean much lower prices in the coming weeks."

The dollar blasted off yet the price of oil shot up nearly 3%. The chart of oil isn't out of the woods yet, but I didn't see that combination coming yesterday. it could have been a "fake out" move because it is still under resistance. Perhaps the trade deal, which included the European Union agreeing to buy $750 billion is US energy, had something to do with it.

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The 2-day FOMC meeting starts today with a policy statement and interest rate decision announced tomorrow at 2 PM ET.

Microsoft and META report earnings after the closing bell on Wednesday, and Apple and Amazon report after the close on Thursday.

We will get the July jobs report on Friday morning.




The DWCPF / S-fund was basically flat yesterday and it has been flattening the last few days. Once again, no major pullback, but rather a quiet consolidation above resistance. This won't last forever, but it's working for now.

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BND (bonds / F-fund) was down modestly yesterday with yields moving up. It has been churning between the previous highs, and the recent low at the 50-day EMA.

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Thanks so much for reading! We'll see you back here tomorrow.

Tom Crowley


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