Market Insights: Wednesday, June 25th, 2025
Market Overview
Markets hit a pause on Wednesday after a strong two-day rally, with mixed performance across the major indices. The Nasdaq eked out modest gains, lifted by a 4% surge in Nvidia that propelled the AI leader to a new record closing high. President Trump declared the Israel-Iran conflict “over for now,” helping to ease geopolitical tensions, while Federal Reserve Chair Jerome Powell continued his testimony before Congress, emphasizing that the Fed is still evaluating the inflationary impact of Trump’s tariffs before making a call on interest rate cuts. His remarks suggested a cautious stance, dampening the bullish momentum seen earlier in the week.
The S&P 500 came close to setting a new record but ended the session nearly flat, stalling just under its all-time high. The Dow Jones slipped more than 100 points, falling 0.25% as defensive names lagged. Market sentiment remained tentative as Powell, under pressure from Republican senators, reiterated that tariff-related inflation would take time to materialize but remains a factor in the Fed’s rate outlook. He highlighted that the central bank is waiting on more data, notably this Friday’s PCE report, before moving forward with cuts. Investors are also watching the truce between Israel and Iran, which, despite earlier violations, appears to be holding for now. As tensions continue to de-escalate, oil prices crept higher, reflecting reduced risk premiums rather than new supply concerns.
SPY Performance
SPY edged higher by 0.06% on Wednesday, closing at $607.15 after opening at $607.94. It traded in a tight range with an intraday high of $608.61 and a low of $605.54. Volume came in lighter at 56.52 million shares, indicating a market pause after the prior session’s surge. While gains were muted, SPY managed to close above key support at $605, keeping bullish momentum intact. The narrow trading range and low volume suggest consolidation, but holding above $605 is a positive sign for bulls looking to challenge all-time highs.
Major Indices Performance
The Nasdaq led with a 0.31% gain on Wednesday, driven by Nvidia’s rally and renewed interest in AI-linked tech. The S&P 500 finished flat, just shy of record territory, while the Dow Jones fell 0.25%, dragged lower by weakness in financials and healthcare. The Russell 2000 underperformed sharply, dropping 1.08% as small caps gave back recent gains. Overall, market breadth narrowed, reflecting some hesitation as traders weighed Powell’s testimony and looked ahead to key economic data. While the tech-heavy Nasdaq continues to outperform, cyclical and defensive sectors showed weakness, suggesting a more selective risk appetite.
Notable Stock Movements
Nvidia was the standout performer, rallying over 4% to a new record high above $154 as investors cheered its continued dominance in the AI space. The move was sparked in part by Loop Capital’s bullish price target of $250, which would imply a $6 trillion valuation. Apple, Alphabet, and Microsoft also posted gains, reinforcing strength in the tech sector. In contrast, Tesla fell sharply by 3.77%, leading laggards within the Magnificent Seven. While most of the group posted mixed results, the spotlight clearly belonged to Nvidia, whose breakout fueled optimism for the broader AI trade.
Commodity and Cryptocurrency Updates
Crude oil rose 1.29% to settle at $65.20, continuing its recent recovery as geopolitical risks faded. The de-escalation in the Middle East supports our long-standing view that oil is on a path toward $60, barring renewed conflict. Gold climbed 0.44% to $3,348, reflecting a slight return of caution as Powell’s tone turned more data-dependent. Bitcoin advanced 1.42%, closing above $107,600. Momentum remains positive, and we maintain our strategy of buying Bitcoin as a long-only trade between $83,000 and $77,000, while avoiding positions below $77K due to risk of deeper declines.
Treasury Yield Information
The 10-year Treasury yield dipped 0.21% to close at 4.281%, helping to stabilize equity markets despite the day’s stall. Yields continue to hover below the critical 4.5% threshold, where equity pressure typically increases. The modest decline in yields reflects ongoing expectations of future Fed easing, although Powell’s cautious remarks about tariffs have introduced some uncertainty. As long as yields remain below 4.5%, stocks should maintain some breathing room.
Previous Day’s Forecast Analysis
Tuesday’s forecast projected a bullish range for SPY between $604 and $610, emphasizing the importance of holding above $602 and the potential for upside targets at $609 and $612. The bias leaned clearly bullish, with actionable intelligence favoring long trades above $600. A break above $610 was seen as a potential path to challenge all-time highs, while failure to hold $602 could lead to a retest of $600. The model suggested traders should stay nimble around Powell’s continued testimony and incoming economic data, reinforcing a flexible but bullish posture.
Market Performance vs. Forecast
Wednesday’s SPY session aligned closely with the prior day’s forecast. SPY opened at $607.94, dipped slightly to an intraday low of $605.54, and closed at $607.15, comfortably within the projected $604 to $610 range. The $605 level acted as solid support, and while SPY didn’t hit the upper targets at $609 or $612, it stayed in breakout territory, maintaining bullish structure. Price action was choppy, as expected, and favored long setups near support zones. The predicted narrow range and consolidation behavior were spot-on, offering disciplined traders a modest but reliable opportunity to ride the market’s slow upward grind.
Premarket Analysis Summary
In Wednesday’s premarket analysis posted at 7:15 AM, SPY was trading at $607.03 with a bullish bias above the $606 level. The analysis projected potential resistance at $609.60 and $615, and support at $606, $604.50, and $600. The outlook called for a difficult, rangebound session with tight consolidation under the bias level, favoring a gradual move higher but warning of potential rejection at $609.60. Downside risk was considered low unless SPY lost $604.50, with traders advised to stay cautious on chasing downside without strong signals.
Validation of the Analysis
The premarket roadmap proved highly effective. SPY respected the $606 bias level throughout the session and held above key support at $604.50. While the market struggled to reach the $609.60 target, the move toward it was consistent with the slow grind forecasted. Price action stayed rangebound and respected the outlined levels, validating the model’s call for a choppy, tight session with limited upside. Traders who avoided chasing early weakness and instead looked for support-based entries near $605 were rewarded with clean setups and manageable risk.
Looking Ahead
Thursday brings key data releases with GDP and Unemployment Claims, both of which could impact the Fed’s rate path outlook. Markets will also be positioning ahead of Friday’s PCE report, which remains the Fed’s preferred inflation metric. These back-to-back economic releases could bring increased volatility and alter current expectations around monetary easing. Traders should prepare for heightened sensitivity to economic headlines through the remainder of the week.
Market Sentiment and Key Levels
SPY closed at $607.15, solidly above support and holding breakout levels. Sentiment remains bullish with the bulls still firmly in control, underpinned by easing geopolitical risk and hope for Fed cuts. Key support levels to watch are $605, $602, and $600. Resistance stands at $610, $612, and $615. A breakout above $615 could ignite a new leg higher toward fresh all-time highs. However, failure to hold $605 would likely invite a test of $600. With Powell’s testimony now in the rearview and key data ahead, market tone could shift quickly, requiring traders to remain agile and focused on these levels.
Expected Price Action
Our AI model projects SPY’s trading range for Thursday between $604 and $610. This is a moderately narrow range suggesting more choppy, sideways trading, though continued momentum may push prices incrementally higher. The market leans bullish, and actionable intelligence favors long setups above $605 targeting $610 and $612. A move above $612 could extend the rally toward $615 and beyond, especially with PCE data looming. On the flip side, a break below $602 could signal a test of $600, and a drop below that would open the door to $595 or even $590. The market’s next move hinges on economic releases, so traders should watch closely for failed breakouts or breakdowns around these levels to guide positioning.
Trading Strategy
With SPY holding strong above $605, traders should continue to favor long trades on pullbacks to $605 and $602, targeting $610 and $612. If SPY can decisively break through $612, $615 becomes a realistic near-term target. Short trades may be considered on failed breakouts near $609 or $610, aiming for a return to $605, though these carry lower probability in the current environment. The VIX dropped another 4.12% to 16.76, reflecting a relatively calm market with limited fear, though upcoming data could change that quickly. Keep stops tight, especially near resistance zones, and maintain smaller positions until volatility returns. Avoid trading during tight consolidations, and favor moves that develop around our key support and resistance levels with clear confirmation.
Model’s Projected Range
The model projects SPY’s maximum range for Thursday between $602 and $611.50, with the Call side dominating within a narrowing band, suggesting choppy price action on Thursday. Today’s session unfolded as expected, with the market consolidating its recent gains and trading mostly sideways, as SPY closed slightly higher at $607.12, signaling continued momentum that could challenge the previous high of $613.23. While ongoing uncertainties, particularly around tariffs, warrant cautious optimism, the broader bullish trend remains intact as long as SPY holds above $585. For Thursday, bulls will aim to defend the $605 level, which would support another leg higher; failure to hold this level could lead to a pullback toward $600 or even $595, though meaningful downside would require a break below $590. In the absence of a major catalyst, our model suggests dips will continue to be bought, with the market grinding higher. A minor overnight pullback could present another buyable opportunity, with resistance now at $610, $612, and $615, and support at $605, $602, and $600. SPY remains above the lower boundary of the redrawn bull channel from April, and while resistance between $608 and $615 is dense, a breakout above $615 could drive prices well beyond the all-time high. Conversely, a drop below $600 could introduce deeper downside risks, though still within a bullish context. Market direction continues to track macroeconomic indicators, bond yields, inflation data, tariffs, and fiscal policy, a trend likely to persist barring a major shift. Meanwhile, the VIX fell 4.12% to 16.76, signaling reduced investor caution and a continued risk-on tone, though traders should stay nimble amid potential for rising volatility.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a narrow Ranging Market State, with SPY closing below MSI resistance. There were few extended targets today as SPY mostly moved sideways with the MSI spending much of the day in a ranging state, only briefly in a bullish and bearish state. Overnight SPY drifted higher which saw the MSI rescale to a wide bullish state. Extended targets printed overnight and for a few minutes just after the open. SPY paused at MSI resistance at $608 for much of the morning session and the MSI rescaled to a very narrow ranging state with periods of bearish state as well. But the bearish state MSI was quite narrow with few extended targets below. This indicated while the market was weakening, it wasn’t going to move in a material fashion. As a result, at the end of the day, the MSI remained in its current narrow ranging state, setting up another day of chop on Thursday. Currently MSI support stands at $606.20 with resistance at $607.07.
Key Levels and Market Movements:
On Tuesday, we noted: “The broader uptrend remains intact as long as SPY holds above $585,” and added, “If SPY holds above $590 on Wednesday, a highly probable scenario, a move toward $610 is in play.” Finally, we stated, “We continue to favor long setups above $590, while tactical shorts may be considered above $609.” With this actionable roadmap in hand and SPY opening above $608, we had no interest in initiating longs so close to the $609 fade level. Likewise, we didn’t short immediately, as the MSI remained in a wide bullish range, with extended targets printing in both the premarket and shortly after the open. So, we waited. While we had hoped to see $609 tested as a fade spot, SPY hovered around $608 for 90 minutes without making a move. Eventually, we initiated a short at $608 on a triple top formation just before 11 a.m. Our first target was set at the premarket level of $606, noting that MSI support was much lower. We always take the first available level, whether from the premarket report or MSI, as both are derived from the same inputs, though premarket levels can often offer more near-term insight. We held the short until just after 1:30 p.m., when MSI rescaled to a bearish state. A dip to $605.50 allowed us to exit 70% of the position. However, SPY then set up a textbook failed breakdown at $605.50. With no extended targets below, a narrowing bearish MSI, and major support in play, all against the backdrop of the prevailing uptrend, we exited and reversed long at $606, targeting MSI resistance at $607. Just after 3 p.m., we hit our first target. Given the narrow MSI ranging state and time of day, we anticipated limited upside but held the remaining position to see if a late push might materialize. Ultimately, we exited the final 30% at the close, just shy of our first target. Once again, it was a two-for-two day, thanks to a structured plan, disciplined execution, and strategic use of MSI for directional control, timing, and actionable levels. Integrated within our broader framework and model levels, MSI remains an indispensable tool for consistent trading performance.
Trading Strategy Based on MSI:
Thursday brings GDP and Unemployment Claims, which could modestly impact the market. Powell’s recent commentary has been notably supportive, reinforcing the case for lower interest rates and paving the way for continued market strength. Barring any macro shocks, the broader uptrend remains intact as long as SPY holds above $585. For bulls, maintaining levels above $605 on Thursday is key to sustaining the push higher. Whether today’s consolidation has built enough energy for that move remains to be seen; a low-volume, low-volatility session could repeat on Thursday. Bears would need to see a break below $600 to become engaged, though even that may result in only limited downside. A close above $610 would likely indicate another leg higher, putting all-time highs within reach. External risks like tariff headlines still pose challenges to sentiment, but the market’s breakout from the $575–$595 consolidation zone signals a shift toward strength. If SPY holds above $605 on Thursday, a move toward $610 is in play; a break below $605 could open the door to $600 and potentially draw in sellers. Still, absent a significant breakdown, the path of least resistance remains upward. We continue to favor long setups above $600, while tactical shorts may be considered above $610 or on failed breakouts and failed holds below $590, especially when MSI points to weakening conditions. Failed moves continue to offer some of the best trading opportunities. Stay nimble and avoid trading during Ranging Market States, ensuring alignment with MSI. MSI provides real-time insights into market control, momentum shifts, and actionable levels. Paired with our Pre-Market and Post-Market Reports, MSI enhances execution precision and improves trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling SPY $608 to $616 and higher strike Calls implying price is unlikely to move substantially higher on Thursday. Dealers are no longer selling close to the money Puts. To the downside, Dealers are buying $607 to $575 and lower strike Puts in a 2:1 ratio to the Calls they’re selling implying little concern that prices may move lower on Thursday. Dealer positioning is unchanged from neutral to neutral.
Looking Ahead to Friday:
Dealers are selling SPY $608 to $625 and higher strike Calls implying price may settle into a range at the current levels. Dealers are no longer selling close to the money Puts. The likely ceiling for the week is currently $610. To the downside, Dealers are buying $607 to $540 and lower strike Puts in a 3:1 ratio to the Calls they’re selling, reflecting a slightly bearish/neutral outlook for the rest of the week. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.
Recommendation for Traders
With SPY holding above $605 and pushing toward upper resistance levels, long setups remain the higher probability trade. Traders should look to buy dips near $605 or lower, with targets at $610 and $612. If SPY breaks above $612, watch for momentum to carry it to $615 or higher. Short trades can be considered near $609 or $610, but only on confirmed failed breakouts, targeting a move back to $605. With the VIX falling to 16.76, market sentiment remains calm, but upcoming economic releases could increase volatility. Use tight stops around resistance zones and stay cautious until the market digests Thursday’s data.
Review the premarket analysis posted before 9 AM ET to account for any changes in the model’s outlook and in Dealer Positioning.
Good luck and good trading!
