Market Insights: Tuesday, July 15th, 2025

Market Overview

Markets finished Tuesday on a mixed note as hotter-than-expected inflation data weighed on sentiment, with the Dow plunging while the Nasdaq managed a modest gain thanks to strength in AI-related tech. The June Consumer Price Index came in above forecasts, rising 0.3% month over month and 2.7% year over year, prompting renewed fears that tariff-driven inflation is beginning to take hold. Treasury yields jumped in response, and traders lowered expectations for Fed rate cuts in the coming months.

The Dow Jones dropped more than 400 points, or 0.98%, led lower by weakness in health care, financials, and materials, while the S&P 500 fell 0.4% as selling picked up throughout the day. In contrast, the Nasdaq rose 0.18% to close at another record high, powered by a sharp rally in Nvidia. The AI chip leader surged after the company confirmed it had received reassurances from the Trump administration that it could resume chip sales to China—one of its largest markets. The reversal in U.S. trade policy on semiconductor exports helped lift chip stocks broadly, though it did little to support the rest of the market. Meanwhile, big banks officially kicked off earnings season. Results were mixed, with JPMorgan and Wells Fargo sliding while Citi advanced after topping expectations. Trump’s escalating tariff rhetoric also added pressure, as threats against Canada, Mexico, and the EU remain in place ahead of the August 1 deadline.

SPY Performance

SPY fell 0.41% on Tuesday to close at $622.25 after opening at $627.84 and briefly touching a high of $627.86 before selling off steadily through the day. The ETF dipped to a session low of $622.08 before stabilizing late. Volume rose to 68.92 million shares, slightly above average, reflecting active trading amid the CPI release and tariff headlines. Despite early strength, the reversal at major resistance and growing inflation concerns triggered a broad-based pullback, with SPY finishing the day just above critical support.

Major Indices Performance

The Russell 2000 led again with a 0.62% gain, benefiting from renewed interest in small caps. The Nasdaq followed with a 0.18% rise, reaching fresh highs thanks to Nvidia’s breakout. The S&P 500 slipped 0.4%, and the Dow lagged badly, tumbling 0.98% amid weakness in bank and healthcare stocks. Sector performance was mixed. While tech led on chip strength, traditional defensive sectors underperformed, reflecting concern over persistent inflation and the Fed’s response. Overall market sentiment turned defensive following the CPI release, with many investors taking profits and reassessing risk.

Notable Stock Movements

Nvidia stood out with a powerful gain, closing at a new record high after securing approval to resume chip sales to China. That move helped support the Nasdaq but did little to lift other Magnificent Seven names. Meta, Netflix, and Tesla all declined on the day, while Apple, Microsoft, Amazon, and Alphabet ended slightly higher. The overall action reflected rotation within mega-cap tech and a cautious mood as investors awaited more earnings and economic data.

Commodity and Cryptocurrency Updates

Crude oil slid 0.48% to $66.67, continuing its recent drift lower. Our long-term model continues to target a test of the $60 level as global demand concerns linger. Gold fell 0.73% to settle at $3,334, pulling back further as traders reduced exposure to safe havens despite macro headwinds. Bitcoin fell 3.10% to close just above $116,500, reversing Monday’s sharp gains as regulatory optimism faded and CPI data dented sentiment across risk assets.

Treasury Yield Information

The 10-year Treasury yield climbed 1.33% to 4.488%, inching ever closer to the key 4.5% threshold that could pressure equity valuations. The 30-year yield broke above 5% for the first time since May. These moves signal rising expectations that the Fed may hold rates steady longer than previously thought. Yields remain a critical barometer of inflation fears, and any sustained move above 4.8% or 5% could trigger a broader equity correction.

Previous Day’s Forecast Analysis

Monday’s forecast projected a trading range for SPY between $623 and $629 with a cautiously bullish bias above $623. Resistance was expected at $627 and $630, with upside potential toward $632 and $635. On the downside, a failure to hold $623 could trigger a slide toward $618 or even $616. The strategy favored long trades near $623 support and warned that breakouts above $627 could be difficult to sustain without a catalyst. Traders were advised to watch for CPI volatility and adjust accordingly.

Market Performance vs. Forecast

Tuesday’s SPY performance aligned well with the forecasted levels but ultimately failed to follow through on the bullish scenario. The ETF opened at $627.84, briefly hitting $627.86 before reversing sharply—validating the resistance zone. SPY then trended lower through the session, dipping to a low of $622.08 and closing at $622.25, just below the critical $623 support. This drop confirmed the risk outlined in the forecast, especially if $623 failed to hold. The reversal from highs provided a clean short setup for traders watching the model’s levels, and the eventual fade reflected the growing market anxiety around inflation and tariffs.

Premarket Analysis Summary

In Tuesday’s premarket analysis posted at 8:08 AM, SPY was trading at $626.96 with upside targets at $627.75, $629, and $630. Support zones were flagged at $626.90, $624, and $620.50. The outlook suggested early exuberance could give way to profit-taking if CPI data disappointed. The plan favored short entries near upper resistance levels on signs of rejection and called for long setups near key supports like $624 and $620.90. Analysts expected an initial reaction higher, followed by potential retracement and late-day consolidation.

Validation of the Analysis

Tuesday’s action confirmed the premarket outlook almost perfectly. SPY spiked at the open, reaching $627.86—right inside the upper resistance zone—and then reversed quickly as sellers stepped in. The drop toward $622 played out just as forecast, hitting key support below $624. Traders following the plan could have captured both a rejection short and a late-day bounce setup near support. The projected levels, especially $627.75 and $624, proved to be pivotal, offering traders highly actionable guidance once again.

Looking Ahead

Wednesday brings the Producer Price Index (PPI) report, another key inflation metric following Tuesday’s hot CPI reading. The market will be watching closely for confirmation of rising pricing pressures, particularly as tariff impacts begin to show up more clearly. With volatility creeping higher and yields on the rise, a strong or weak PPI print could sharply influence equity and bond markets alike. Thursday follows with Retail Sales and Jobless Claims, rounding out a crucial economic week.

Market Sentiment and Key Levels

SPY enters Wednesday trading near $622, sitting just above major support and below a dense resistance zone. Sentiment has turned more cautious after the CPI surprise, with inflation worries mounting and the Fed outlook in flux. Resistance now sits at $623, $626, $628, and $630, while support is found at $620, $615, $613, and $609. Bulls need to defend $620 overnight to keep upward momentum alive, but any drop below this level could open the door to deeper downside. The bears are gaining traction, and any further jump in yields could accelerate selling.

Expected Price Action

Our AI model projects SPY to trade between $618 and $628.50 on Wednesday, reflecting a relatively narrow range with choppy price action likely. This is actionable intelligence: with the put side dominating, a cautious bias remains in place. If SPY holds above $620, a rally toward $626 and $628 is possible, though resistance near $630 may cap gains. If $620 fails, expect a test of $615 and possibly $613. While inflation and tariff concerns loom large, any relief on the data front could shift momentum back toward the bulls. Still, traders should anticipate two-way moves and stay nimble.

Trading Strategy

With SPY trading near key support, long entries are favored above $620 targeting $626 and $628. Traders should look for confirmation before entering, especially if volatility remains elevated. On the upside, a breakout above $628 opens the door for a push toward $630, though headwinds may limit further gains. Short trades may develop from failed rallies at $626 or $628, particularly if PPI data disappoints. A clean break below $620 could lead to a test of $615 and $613. With the VIX rising 1.05% to 17.38, signaling increased uncertainty, tight stops and smaller position sizes remain essential.

Model’s Projected Range

The model projects SPY’s maximum range for Wednesday between $618 and $628.50 with the Put side dominating within a narrow 5-point range, suggesting choppy price action interspersed with occasional trending moves. Today’s session once again saw premarket dips being bought following worse-than-expected CPI data. However, that initial optimism was short-lived. After reaching major overhead resistance at the day’s highs, the market reversed course and spent the rest of the session trending lower. Growing fears around inflation and the “higher for longer” rate narrative, alongside surging bond yields, pushed the market onto the defensive. SPY ultimately closed at $622.25. The market remains in a complex, rangebound chop that will likely take time to resolve. Volume was slightly above average. Despite continued tariff uncertainty, the broader uptrend remains intact as long as SPY holds above $585. In the absence of a major catalyst, continued consolidation appears likely. Key resistance levels are $623, $626, $628, and $630, while support is found at $620, $615, $613, and $609. Bulls will look to defend $620 overnight to support another leg higher. A break below that level could trigger a quick pullback toward $618, with $615 also in play. While SPY may continue grinding higher, any significant catalyst could prompt a more decisive move. Downside risk remains limited unless SPY breaks below $600, which would open the door for a test of $585, though our model currently assigns a low probability to that outcome. Once again, in the absence of a clear catalyst, dips toward $620 are expected to be bought. Below $615, our stance turns bearish, with $610 as the next downside target. SPY closed just outside the lower edge of the redrawn bull channel from the April lows, with strong resistance expected between $626 and $630, which may cap further upside. The market remains highly sensitive to macroeconomic data, bond yields, inflation readings, tariff developments, and fiscal policy changes. Meanwhile, the VIX rose 1.05% to 17.38, maintaining a cautious risk-on tone. However, with the VIX climbing for three consecutive sessions, caution is warranted. Last week, we advised long books to consider buying out-of-the-money calls with 90-day expirations. We continue to recommend this hedge for those who have not yet acted. Preparing for potential volatility with this or a similar strategy remains prudent. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a Bearish Trending Market State, with SPY closing well below the bottom of the range. The MSI rallied strong in the premarket with extended targets above but at the open and the highs of the day, SPY fell and continued to fall with the MSI moving through a ranging state to a bearish state. There were a couple of extended targets below while in the current state but nothing too extreme implying a weak bear trend that will likely be bought once again. Certainly, the fears of higher interest rates and higher tariffs could derail the bull trend but  given the recent history, the bulls will attempt to hold price above $620 overnight to support a rally on Wednesday. The current MSI state implies a slow and grinding continuation of the bull trend with periods of further consolidation. Currently MSI resistance stands at $623.08 and higher at $624.21.
Key Levels and Market Movements:
On Monday, we wrote: “Tuesday brings CPI premarket, which could shape the day’s action.” We also noted, “Overnight, if bulls can hold $620, a push to $630 is possible on Monday,” and added, “A failure to hold $623 could lead to a test of $620.” With SPY opening above $627.75 and with SPY at MSI resistance and without any extended targets above, we were short on the quadruple top at $627 and set T1 for MSI support at $626.17. We reached this target quickly and set our sights on T2 at $624, a premarket level. That too came quickly so we trailed the remaining 10% with a stop at breakeven, thinking $621 may come into play. Late in the day with the MSI in a bearish state and extended targets printing, we held and exited at the close with a one and done, fantastic trade that nicely padded the wallet. Once again, thanks to a disciplined daily plan, the MSI’s effectiveness in providing directional clarity and timing, and the seamless integration of MSI levels with our broader model. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Wednesday brings PPI premarket, which could once again shape the day’s action. Be prepared to trade what you see and stay alert to any tariff-related threats from the White House. In the absence of such catalysts, a slow grind higher with periods of consolidation appears likely. The market continues to show a willingness to overlook these risks, increasing the likelihood of a continued rally. While caution remains warranted, we still expect the market to grind higher with bulls stepping in overnight. If the bulls can hold $620, a push to $628 is possible on Wednesday. A failure to hold $620 could lead to a test of $618 and potentially $615, where we once again expect buyers to step in. A decisive move below $615 would increase the odds of a deeper pullback toward $600. Until then, we anticipate that buyers will continue supporting dips, barring any unexpected negative headlines from the White House. If key levels hold, the market is likely to resume its steady climb toward $635. Currently, MSI remains in a Bearish Trending Market State, suggesting lower prices overnight but again, watch for buyers at major support levels. For bears to gain traction, a break below $600 would be necessary, while a close back above $625 supports the case for a move toward $635. We continue to favor long setups above $615, while short opportunities may emerge above $625 or on failed breakouts or breakdowns below $615, particularly when MSI indicates weakening conditions. As always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate 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 $626 to $635 and higher strike Calls while also buying $623 to $625 Calls in small size, indicating the Dealers desire to participate in any rally on Wednesday. The likely ceiling for tomorrow is $628. To the downside, Dealers are buying $622 to $575 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying implying some concern that prices may move lower on Tuesday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.   
Looking Ahead to Friday:
Dealers are selling SPY $627 to $650 and higher strike Calls while also buying $623 to $626 Calls indicating the Dealers desire to participate in any continuation of the rally this week. Dealers are positioned for SPY to move as high as $630 but not likely beyond this level. To the downside, Dealers are buying $622 to $555 and lower strike Puts in a 5:1 ratio to the Calls they’re selling/buying, reflecting a bearish outlook for the week. Dealer positioning is changed from bearish to bearish but increasingly so. 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

SPY slipped sharply after testing key resistance near $628, closing the session just above major support. Traders should watch $620 closely heading into Wednesday. Long entries remain favored on holds above $620 with upside targets at $626 and $628. Breakouts above $628 could target $630, though buyers may need strong macro support to push through. If $620 fails, short entries may target $615 and $613. With VIX rising to 17.38 and market anxiety building, smaller position sizes and tighter risk controls are advised.

Review the premarket analysis posted before 9 AM ET to align with the latest model levels and Dealer Positioning.

Good luck and good trading!