Market Insights: Thursday, June 26th, 2025

Market Overview

Stocks pushed higher Thursday as optimism around potential rate cuts drove the S&P 500 closer to its first record close since February. The index rose 0.8%, hovering just below the all-time high of 6,144.15, while the Nasdaq climbed more than 1% and the Dow Jones added nearly 400 points for a 0.94% gain. The day’s rally came amid increasing speculation that the Federal Reserve may be nearing a rate cut, especially as President Trump signaled growing frustration with Chair Jerome Powell’s cautious stance. Reports now suggest Trump could announce a replacement for Powell by September or October, raising the odds of a more dovish Fed leadership ahead.

Investors also responded positively to comments from the White House signaling a more flexible stance on the July 9 tariff deadline. While Trump previously demanded trade deals by that date, his press secretary indicated it’s not a firm cutoff, and chief economist Stephen Miran suggested that countries negotiating in good faith may see an extension. Meanwhile, the U.S. dollar continued its slide, hitting its lowest point since April 2022, pressured by both trade concerns and rate cut expectations. Treasury yields slipped further, with the 10-year falling to around 4.25%.

Thursday’s economic data painted a cloudy picture, with the final GDP print showing the economy shrank by 0.5% in Q1, worse than expected. Jobless claims also ticked higher, with continuing claims now at their highest level since late 2021. With investors eyeing the Fed’s preferred inflation metric, the PCE report set for release Friday, markets appear increasingly confident that weakening economic momentum and easing inflation pressures will tilt the Fed toward cuts in the months ahead.

SPY Performance

SPY gained 0.79% on Thursday, closing at $611.93 after opening at $609.11. It traded within a fairly tight range with an intraday high of $612.31 and a low of $608.37. Volume surged to 70.85 million shares, marking an uptick from Wednesday and signaling renewed interest as the ETF pressed toward all-time highs. The close above $610 was a critical technical development, maintaining bullish momentum and setting the stage for a potential test of SPY’s record high at $613.23.

Major Indices Performance

The Russell 2000 led Thursday’s advance with a strong 1.60% gain, outperforming the other major indices as small caps roared back to life. The Nasdaq rose 0.97%, boosted by strength in tech and AI-linked names, while the Dow added 0.94%, continuing its rebound from earlier in the week. The S&P 500 climbed 0.8%, settling just under its all-time high. Overall, broad-based buying returned, as investors interpreted economic softness as fuel for Fed easing. Cyclical names and growth stocks outperformed, while defensive sectors lagged slightly, reflecting the market’s tilt toward risk-on positioning.

Notable Stock Movements

Among the Magnificent Seven, Amazon, Meta, and Netflix each surged more than 2.4%, leading the charge higher and reinforcing tech’s leadership. Nvidia extended its gains with a 1% rise, maintaining its momentum following Wednesday’s breakout. Meanwhile, Apple and Tesla bucked the trend, both posting slight declines. The overall picture remained bullish for mega-cap tech, with buying concentrated in names tied to AI and digital advertising. This continued strength in key tech leaders has helped fuel the broader rally and kept market sentiment on solid footing.

Commodity and Cryptocurrency Updates

Crude oil climbed another 0.82% to settle at $65.46, continuing its path toward normalization as the ceasefire between Israel and Iran held. With geopolitical tensions easing, our model still sees crude gradually trending toward $60 barring any new conflict. Gold ticked up 0.08% to $3,345, reflecting a mixed view on inflation risks as the market awaits Friday’s PCE report. Bitcoin edged down 0.26%, closing just above $107,500. Despite the minor dip, the long-only strategy between $83,000 and $77,000 remains intact, with caution warranted if price dips below $77,000 due to risk of deeper declines.

Treasury Yield Information

The 10-year Treasury yield dropped by 1.17% to close at 4.240%, continuing its decline as investors bet on slowing growth and a more dovish Fed outlook. Yields remain comfortably below the key 4.5% threshold, keeping equities supported for now. While the recent economic data has added to fears of stagnation, it has also reinforced expectations for interest rate cuts later this year. A sustained drop in yields is typically supportive for growth stocks, and Thursday’s action reflects that alignment.

Previous Day’s Forecast Analysis

Wednesday’s forecast projected SPY to trade between $604 and $610, with a bullish bias targeting resistance at $610 and $612. The analysis called for long trades from $605 and $602 levels, favoring continuation higher unless SPY broke down below $602. Resistance at $609 and $612 was noted as key decision points, with the potential for a rally to $615 if $612 was breached. The strategy emphasized discipline and patience around Powell’s testimony and anticipated economic data, maintaining a flexible but bullish posture heading into Thursday.

Market Performance vs. Forecast

Thursday’s market performance was nearly textbook relative to the forecast. SPY opened at $609.11 and traded as low as $608.37 before climbing to a high of $612.31 and closing strong at $611.93, just shy of the $612 target and within striking distance of the projected upper level of $615. The $607–$610 range proved to be a key battleground early in the session, and bulls prevailed as the ETF pushed through resistance with authority. The anticipated upside momentum materialized, and long trades from $607 and $608 offered clear profit potential. The market’s climb through the forecasted range confirmed the model’s outlook, with levels playing out cleanly and in favor of disciplined long setups.

Premarket Analysis Summary

In Thursday’s premarket analysis posted at 8:36 AM, SPY was trading at $608.89 with a bullish bias above the key level of $607. The analysis outlined upside targets at $610 and $613, and downside levels at $607, $604, and $601. The tone favored long trades near $607 as long as that support held, with a warning about potential pullbacks toward that zone throughout the session. It emphasized early profit-taking on long entries and cautioned against aggressive shorting unless a strong rejection occurred near resistance.

Validation of the Analysis

The premarket roadmap proved spot-on again. SPY respected the $607 bias level throughout the session, dipping only slightly below intraday before launching higher. The forecasted resistance levels at $610 and $613 played a major role, with the market tagging $612.31 by the close. The call for long trades from $607 delivered a profitable strategy, as the session followed the anticipated script almost perfectly. The market’s choppy rise, coupled with pullbacks to support, offered disciplined traders several clean entry opportunities, validating the premarket game plan.

Looking Ahead

All eyes now turn to Friday’s PCE inflation report, the Fed’s most-watched gauge for price stability. It will be a critical data point as markets gauge whether Trump’s tariffs are beginning to show up in consumer prices. A soft read could accelerate rate cut expectations, while a hot number could shake market confidence. Next week brings a stacked calendar, with Tuesday’s ISM and JOLTS reports followed by Powell’s remarks, leading into Thursday’s all-important Jobs Report. With Friday marking the last trading day before the July 4th holiday week, positioning could get active quickly.

Market Sentiment and Key Levels

SPY ended Thursday at $611.93, maintaining a solid foothold above breakout territory. Sentiment remains bullish, underpinned by easing geopolitical risk, declining yields, and mounting expectations of a Fed pivot. Resistance now lies at $612, $615, and $620, with support seen at $608, $607, and $606. If bulls push SPY above $615, a test of new all-time highs is likely. However, failure to hold $608 could trigger a move toward $605 or even $600. With the market pressing into dense resistance and volatility expected around Friday’s inflation data, traders should stay nimble and prepared for fast shifts in sentiment.

Expected Price Action

Our AI model projects SPY’s trading range for Friday between $607 and $615. This moderately wide range suggests choppy, two-way price action, though bullish momentum remains the dominant theme. Actionable intelligence favors long setups above $608, with targets at $612, $615, and $620. A sustained break above $615 could clear the path to fresh highs. On the downside, a move below $608 could open a test of $605, and if that level fails, look for buyers to re-engage around $600. As Friday’s session coincides with a major inflation report, traders should be alert for failed breakouts or breakdowns around key levels to guide intraday positioning.

Trading Strategy

With SPY closing above $611 and testing key resistance, traders should look to buy pullbacks to $608 and $607, targeting moves toward $612, $615, and possibly $620. Breakouts above $615 should be monitored closely, as they may extend quickly toward new higher highs. Short trades can be considered on failed breakouts above $615 or confirmed reversals at that level, targeting moves back toward $610 or $608, but these setups carry lower conviction. The VIX dropped another 1.73% to 16.47, confirming a calm market environment for now. However, traders should size positions conservatively ahead of Friday’s PCE release and use stops tightly to avoid getting caught in rapid post-data reversals.

Model’s Projected Range

The model projects SPY’s maximum range for Friday between $606.50 and $616.50, with the Call side dominating within a narrow band, suggesting choppy price action on Friday. Today’s session extended the bullish trend, with prices approaching the all-time high of $613.23. While uncertainties, particularly around tariffs, warrant cautious optimism, the broader uptrend remains intact as long as SPY holds above $585. On Friday, bulls will look to defend the $608 level, which could pave the way for another leg higher. A failure to hold this level may trigger a pullback toward $605 or $600; however, meaningful downside would likely require a break below $590. In the absence of a major catalyst, our model continues to suggest that dips will be bought, with the market grinding higher. A minor overnight pullback may present another buyable opportunity. Resistance is now seen at $612, $615, and $620, while support lies at $608, $607, and $606. SPY remains above the lower boundary of the redrawn bull channel from April. Although resistance between $612 and $615 is dense, a breakout above $615 could propel prices beyond the all-time high. Conversely, a drop below $600 could introduce deeper downside risk—though likely still within a broader bullish context. Market direction remains closely tied to macroeconomic indicators, bond yields, inflation data, tariffs, and fiscal policy, factors that will continue to shape sentiment barring a significant shift. Meanwhile, the VIX declined 1.73% to 16.47, reflecting reduced investor caution and a continued risk-on tone. Still, traders should remain nimble amid the potential for rising volatility. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a narrow Bullish Trending Market State, with SPY closing well above MSI resistance turned support. Extended targets printed for most of the session today which kept the herd pushing prices toward the all-time highs. The MSI did not rescale all day today but with extended targets supporting price, SPY had only one way to move and that was straight up. Overnight SPY gapped up and the MSI rescaled three times, remaining in a bullish state since before the open. While the MSI range is narrow and like yesterday, it did not rescale all day, overnight watch for another rescale higher and for extended targets as this will indicate another day of higher prices. Currently MSI support stands at $609.47 and lower at $608.49.
Key Levels and Market Movements:
On Wednesday, we noted: “For bulls, maintaining levels above $605 on Thursday is key to sustaining the push higher,” and added, “If SPY holds above $605 on Thursday, a move toward $610 is in play.” We also reiterated, “We continue to favor long setups above $600.” With this actionable roadmap in hand and SPY opening above $608, our focus was clear: find a way to get long. SPY pulled back to MSI support at $608.50, and with a double bottom forming alongside a less-than-perfect failed breakdown, we entered long at MSI support. Our first target was MSI resistance at $609.50, which was hit before 10 AM. We then set our sights on the premarket level of $610 for T2, which also came quickly. With a stop at breakeven and a free runner in play, we were well-positioned. As extended targets began printing, we aimed for $613 with the remaining 10% of our position. The market slowed but continued grinding higher, and just before the close, we opted to exit at $612, satisfied that it was the best we’d get. It was a single trade, but it paid well. Relatively easy money with minimal stress, 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 continues to be an indispensable tool for consistent trading performance.
Trading Strategy Based on MSI:
Friday brings the Fed’s preferred inflation gauge, PCE, which has the potential to move the market, alongside chatter about extended tariff deadlines. Combined with a dovish Powell, the setup favors continued upside. As long as SPY holds above $585, the bulls remain firmly in control. For Friday, maintaining levels above $608 will be key to pushing past February’s highs. Volume confirmed Thursday’s strength, and for bears to gain traction, price would need to break below $600—though even that may only trigger limited downside. With a close above $610, a move toward $615 and new highs becomes highly probable. While external risks like tariff headlines can still impact sentiment, the breakout from the $575–$595 consolidation zone points to growing strength. Holding $608 keeps the door open for a push toward $615, while a break below could invite a test of $605 and potentially attract sellers. Still, absent a significant breakdown, the path of least resistance remains upward. We continue to favor long setups above $605, while tactical shorts may be considered above $615 or on failed breakouts and failed holds below $590, particularly when MSI signals weakening conditions. Failed moves continue to offer high-quality trading opportunities. Stay nimble and avoid trades during Ranging Market States, ensuring alignment with MSI. MSI delivers real-time insight into market control, momentum shifts, and actionable levels. Combined with our Pre-Market and Post-Market Reports, MSI significantly enhances execution precision and 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 $612 to $625 and higher strike Calls while also selling $608 to $611 Puts in small size, indicating the Dealers belief that prices will move higher on Friday. Dealers do not sell Puts close to the money if they are concerned about price falling. The ceiling for Friday appears to be $615. To the downside, Dealers are buying $607 to $575 and lower strike Puts in a 1:1 ratio to the Calls/Puts they’re selling implying little concern that prices may move lower on Thursday. Dealer positioning has changed from neutral to bullish.   
Looking Ahead to Next Thursday:
Dealers are selling SPY $612 to $635 and higher strike Calls while also selling $602 to $611 Puts indicating the Dealers belief that prices will move higher next week. Dealers do not sell close to the money Puts if they have concern about prices falling. The likely ceiling for next week is currently $620. To the downside, Dealers are buying $601 to $540 and lower strike Puts in a 2:1 ratio to the Calls/Puts they’re selling, reflecting a neutral outlook for the next week. Dealer positioning has changed from slightly bearish/neutral to 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 now pressing through resistance and closing above $610, long setups continue to hold the edge. Traders should watch for dips to $608 or $607 as potential re-entry levels, targeting $612 and $615 on the upside. A confirmed breakout above $615 could open a sharp move toward $620. Short trades should only be considered if a clear rejection occurs near $615 or $620, with targets back toward $610 or $607. With VIX at 16.47 and still low, conditions remain favorable for controlled risk-taking, but Friday’s PCE report could be a game-changer. Manage risk carefully, keep stops tight near resistance, and avoid overleveraging ahead of key 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!