Market Insights: Thursday, August 7th, 2025

Market Overview

Stocks climbed again on Wednesday as traders balanced the latest round of earnings with growing trade tensions. The S&P 500 rose over 0.7%, the Nasdaq led with a 1.2% gain, and the Dow edged higher by 0.2% in a session powered by Big Tech. Apple soared nearly 6% after news broke that CEO Tim Cook will appear alongside President Trump at the White House to unveil a $100 billion domestic manufacturing investment. The move is widely seen as Apple’s strategy to sidestep steep tariffs, with administration officials confirming the company will avoid most of the 50% duties set to hit Indian imports later this month. The White House imposed the additional 25% tariff on India in retaliation for its ongoing purchases of Russian oil.

The earnings spotlight shifted to Disney, which topped expectations thanks to strength in its parks and streaming divisions. However, shares declined as investors reacted to weakness in its linear TV business. The company also revealed a deal to acquire NFL media assets, expanding its footprint in sports. On the downside, AMD sold off following a mixed report, while Snap and Super Micro both fell hard on earnings misses. Meanwhile, McDonald’s reversed its recent sales slump and gained ground, and Uber rallied after posting a revenue beat and unveiling a staggering $20 billion stock buyback. Investors also looked ahead to after-hours reports from Airbnb, DoorDash, and Lyft. Internationally, urgency increased among U.S. trade partners to strike deals before Thursday’s looming tariff deadline. Switzerland’s president even flew to Washington in an attempt to avoid a 39% tariff on Swiss goods. Despite the geopolitical drama, markets shifted back into rally mode as the tech sector led a broad-based rebound.

SPY Performance

SPY advanced 0.75% to finish at $632.66, opening at $629.03 and tagging an intraday high of $633.43. After finding support at $628.13 early in the session, SPY climbed steadily through midday before stalling near resistance. Volume was average at 60.30 million shares, and the close near session highs solidified bullish momentum heading into Thursday’s session.

Major Indices Performance

The Nasdaq led the session with a strong 1.21% rally as tech mega caps fueled a broad-based advance. The S&P 500 added 0.75%, while the Dow inched up 0.19%. The Russell 2000 lagged, falling 0.24% and snapping its recent stretch of outperformance. Growth stocks outpaced defensives, with consumer discretionary and technology sectors outperforming, while utilities and healthcare trailed. The rally was driven by upbeat earnings and a sense of relief as Apple appeared poised to sidestep key tariff penalties, helping ease investor worries around trade disruptions.

Notable Stock Movements

Apple stole the spotlight, jumping nearly 6% following its announcement of a massive new U.S. investment and reports it would avoid major tariffs. Other tech leaders like Amazon, Tesla, and Broadcom each gained over 3%, fueling the rally in the Nasdaq. Nvidia, Meta, and Alphabet also moved higher, helping push the Magnificent Seven broadly into positive territory. Microsoft was the lone decliner in the group, slipping 0.53% amid sector rotation. Overall, the strength in large-cap tech reinforced the sector’s grip on market direction.

Commodity and Cryptocurrency Updates

Crude oil extended its decline, falling 1.58% to $64.13 as traders continued to digest demand concerns and supply uncertainties tied to geopolitical tension. Our model maintains a bearish outlook on oil, expecting a move toward $60 in the coming months. Gold ticked up slightly, closing 0.09% higher at $3,430, as safe-haven flows remained muted. Bitcoin gained 1.25%, ending the day above $115,228 as crypto assets mirrored broader risk-on sentiment in equities.

Treasury Yield Information

The 10-year Treasury yield rose 0.81% to settle at 4.230%, staying below the critical 4.5% threshold that could trigger broader equity weakness. While yields remain elevated, they are still within a range that supports the current market rally. A breakout above 4.8% would be a red flag, and a move to 5.2% could trigger a sharp market correction of 20% or more. For now, bond markets remain stable, providing equities with room to climb.

Previous Day’s Forecast Analysis

Wednesday’s forecast projected SPY to trade between $628 and $637.75, with the model favoring a cautiously bullish outlook as long as SPY stayed above $630. Key resistance was expected at $633 and $635, while support zones were highlighted at $627 and $625. Long trades were favored above $630, with shorts recommended on failed rallies near $635 or breakdowns under $630. The analysis also suggested the day could feature consolidation with a chance for an upward push if momentum held, emphasizing a dip-buying strategy.

Market Performance vs. Forecast

SPY’s performance matched the forecast well. After opening at $629.03, the ETF dipped to $628.13 before climbing steadily to $633.43 and closing at $632.66, landing squarely within the projected range. Resistance at $633 held firm, and support near $628 was respected early on. Traders who went long above $630 or on dips near support were rewarded, especially as SPY trended higher into the afternoon. The model’s levels and directional bias once again offered a reliable roadmap for navigating the session, highlighting the effectiveness of leaning into clearly defined support and resistance.

Premarket Analysis Summary

In Wednesday’s premarket report posted at 7:28 AM, SPY was trading at $629.60 with a bearish tilt below the bias level at $631. The analysis warned that rallies under $631 were likely to be sold and suggested short setups near that level, while long trades would become favorable only if SPY reclaimed the bias level. The report outlined targets below at $627, $626, and $625, with upside levels at $633 and $635 if momentum shifted. The overall expectation called for choppy action early in the day, with the possibility of a breakout should bulls take back control above $631.

Validation of the Analysis

The premarket blueprint played out nearly perfectly. SPY opened slightly below the bias level, tested support near $628 early in the session, and then broke above $631 midmorning. That shift sparked a steady move higher into the $633 resistance zone. The breakout above the bias level gave traders a high-probability long setup, while the $633 target capped the day’s advance as expected. The analysis gave clear, actionable levels, and traders following the premarket guidance would have had ample opportunity to capitalize on the breakout and the precise respect of modeled resistance.

Looking Ahead

Friday brings no major economic releases, leaving the market to react purely to earnings and technical levels. With the tariff deadline behind us and no new headlines expected, price action may be more subdued. Still, traders should remain alert for unexpected news or earnings surprises that could spark volatility heading into the weekend.

Market Sentiment and Key Levels

SPY closed at $632.66, solidly above the $630 pivot and reclaiming control for bulls. Sentiment remains cautiously bullish with the market back inside the familiar $625–$635 trading zone. Key resistance levels heading into Friday are $635, $638, and $640. Support remains at $630, $627, $625, and $620. Bulls remain in charge above $625, but a break below $620 could shift momentum back to the bears and spark a move toward $615.

Expected Price Action

Our AI model projects SPY to trade between $629 and $637 on Friday, an actionable range that points to consolidation with intermittent trending behavior. This is actionable intelligence generated by our AI model. The market bias remains bullish above $632, and a clean break above $635 could send SPY toward $638 or even $640. However, if price slips under $629 early in the day, a test of $627 or $625 is likely. The broader trend remains upward, but with no new catalysts expected, markets could continue to churn within the current range.

Trading Strategy

Long trades remain favorable above $630, with upside targets at $635 and $638. If SPY can clear $638, a run toward $640 is in play, though resistance in that zone should be respected. Short trades may be considered on failed rallies near $635 or above, or if SPY breaks below $630, targeting $627 and $625. The VIX dropped 1.19% to 16.57, signaling reduced volatility. Traders should be cautious, as calm conditions can quickly reverse, particularly without a macro catalyst. Continue managing risk carefully in this rangebound environment.

Model’s Projected Range

The model projects SPY’s maximum range for Friday between $627.50 and $638.25, with the Call side dominating within a steady band, suggesting consolidating price action interspersed with intermittent trending moves. Overnight, markets rallied on strong corporate earnings and news that Apple plans to invest heavily in the U.S., sidestepping the 50% tariffs on Indian imports. SPY briefly reached $638 before pulling back slightly into the open. At the open, with price holding just above $636, the setup hinted at a potential push toward $640. However, the initial euphoria faded as the market digested tariff concerns and the highest unemployment claims since November 2021. A sharp sell-off before 10 AM drove SPY to intraday lows at $629.11, before a midday reversal saw dip buyers step in once again, pushing the price to close roughly flat on the day, just above $632, a level that continues to support bullish control. Since reclaiming the $585 level, SPY has maintained a strong uptrend, with consistent dip-buying behavior. Today’s rally was once again led primarily by the Mag 7, which were mostly positive. Volume was average, yet the sharp intraday swings underscore the prevailing market indecision, a hallmark of a trading range. While bulls remain in control and the market bias is upward, we expect a sideways-to-up drift until there’s a breakout from the $625–$635 range. Key resistance levels for tomorrow are $633, $635, $637, and $640, with support at $630, $628, and $625. A break below $625 could trigger a fast move toward $620, given thinning support. Conversely, the $635–$640 zone is likely to offer stiff resistance. Absent a clear catalyst, bulls will likely aim to defend the $628 level overnight. A breakdown there opens the door to $625 or lower. The ultra-bullish scenario would see $632 hold overnight, followed by a rally toward $640, where consolidation is likely. For bears to gain momentum, a decisive break below $625 is needed. As long as SPY remains above that threshold, dip-buying is expected to persist, and a move to new all-time highs remains the base case. A break below $600 would suggest a retest of the critical $585 level long considered the bulls’ line in the sand. While seasonal volatility from August through October typically favors the bears, they remain on the sidelines for now, with bulls still dominating the broader narrative. SPY continues to trade above the lower band of a bullish channel that began forming off the April lows. The VIX fell 1.19% to 16.57, reinforcing a risk-on tone. We continue to recommend hedging long equity exposure with VIX Calls, as we anticipate rising volatility heading into fall. A VIX below 23 remains supportive of equities, but the current contango structure signals heightened volatility risk. A breakout above 23 could trigger the 5–10% pullback we’ve been expecting. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI closed in a Ranging Market State, with SPY closing mid-range. No extended targets printed all day although in the premarket for several hours extended targets printed above price with the overnight MSI rescaling higher to a narrow bullish state. After the open however with SPY resting at MSI resistance, SPY fell and the MSI rescaled to its current ranging state which remained for the entire session. This implies more sideways to up price action overnight and tomorrow, but one which will likely find resistance near $635. MSI support is currently $629.47 with resistance at $634.16.
Key Levels and Market Movements:
On Wednesday, we wrote: “Thursday brings Unemployment Claims, which normally wouldn’t warrant much concern, but given the recent Jobs report, we’ll be watching closely for any signs of weakness,” and added: “While a pullback toward $625 remains possible, it’s highly probable that such a move would be bought.” We also noted: “As long as $632 holds, we expect continued upward momentum. A failure at $632, however, could see a revisit of the $626/$625 area, where we again expect buyers to step in.” With that context in mind, the MSI and SPY opened Thursday in a relatively narrow bullish state, right at MSI resistance with bad news on the employment front. By 9:45 AM, extended targets to the upside had ceased printing, and price began to fall after spending three hours trading at MSI resistance without a breakout. We entered short at $636.50, setting T1 at MSI support at $634. With the first target hit by 10 AM, we turned our attention to T2 at the premarket level of $632.50, intentionally skipping the nearest level given the speed of SPY’s decline. By 11 AM, T2 was achieved, and with our stop moved to breakeven, we had little left to do in an MSI ranging state but trail our final 10%. SPY continued a slow, steady decline toward MSI support at $629.50, just above another key premarket level, our projected final target, where we expected bulls to step in, per the premarket plan. Sure enough, a textbook failed breakdown at 2 PM confirmed the setup, and we exited the short and reversed long just as the MSI rescaled to a bearish state, anticipating the return of dip buyers. They showed up right on cue. We set T1 at the premarket level of $630.50 and T2 at the next higher premarket level of $632.50. Both targets were hit into the close, and we exited the long, ending the day two-for-two once again thanks to a clear plan, disciplined execution, and strong alignment between MSI’s directional cues, our broader market model, and key technical levels. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Friday brings no significant news, so the market is likely to continue doing what it has been, trending higher while waiting for an external catalyst to spark a meaningful pullback and trigger dip-buying. While the current administration continues to present macro risks, absent a clear catalyst, our model favors the bulls, with no consideration for the bears following the close above $632. A pullback toward $625 remains possible, but it’s highly probable such a move would be bought, allowing the market to resume its push toward new all-time highs. For bears to re-enter the picture, a clean break of $625 is required; failure there could lead to a move toward $620 and potentially $615, which may serve as a temporary floor en route to $600. A confirmed break below $600 would be necessary to materially shift the outlook and increase the likelihood of a 9–10% pullback. Currently, the MSI is in a Ranging Market State, and we expect a test of MSI resistance at $634, with an upward bias likely to continue overnight. As long as $632 holds, we expect continued upward momentum. A failure at that level, however, could send SPY back to the $626/$625 zone, where we once again anticipate buyers to emerge. We advise focusing on long setups above $625, while shorts may be considered either on a break below $625 or a push above $635, as we expect increased two-way action during the session. 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 $633 to $650 and higher strike Calls implying the Dealers belief that price may move mostly sideways on Friday. Dealers are no longer selling near the money Puts. The ceiling for Friday appears to be $640. To the downside, Dealers are buying $632 to $575 and lower strike Puts in a 3:1 ratio to the Calls they’re selling continuing to display little concern that prices could move much lower tomorrow. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Next Friday:
Dealers are selling SPY $633 to $650 and higher strike Calls while also buying $637 Calls indicating the Dealers desire to participate in any rally above $637 next week. The ceiling for the week appears to be $650 although $640 and $645 also pose material resistance. To the downside, Dealers are buying $632 to $575 and lower strike Puts in a 5:1 ratio to the Calls they’re selling/buying, reflecting a bearish/neutral outlook for next week. For the week Dealer positioning has changed from slightly bearish/neutral to bearish. 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 remains locked in the $625 to $635 range, providing clear trading levels on both sides. Long trades are preferred above $625, especially if SPY dips and reclaims $630 early. Upside targets include $635 and $638, with $640 acting as the top end of resistance for now. If SPY stalls near $635 or fails to hold $630, short setups targeting $627 and $625 may become attractive. Below $625, the door opens to $620. The VIX sits at 16.77, indicating low volatility, but traders should continue to manage risk tightly and watch for sudden shifts. Review the premarket analysis posted before 9 AM ET for updated model outlooks and changes in Dealer Positioning.

Good luck and good trading!