Cooler Inflation Sparks Rally As Tech, Gold, And Bitcoin Charge Higher

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[Chart courtesy of MarketWatch.com]

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The S&P 500 and Nasdaq got off to a strong start today, led higher by semiconductor stocks after June inflation came in cooler than expected.

The Consumer Price Index (CPI) fell 0.4% for the month, bringing the annual inflation rate down to 3.5%, well below economists’ expectations of 3.8%.

The softer inflation data immediately fueled hopes that the Federal Reserve may not need to be as aggressive with interest rates.

Expectations for a rate hike at the July meeting dropped sharply, while traders continued to price in a better-than-even chance of a move in September.

While today’s CPI report suggests that the inflation spike tied to the Iran conflict may be easing, investors aren’t ready to declare victory just yet.

Geopolitical tensions remain elevated, and traders continued to keep a close eye on oil prices after U.S. crude briefly climbed above $80 per barrel.

Fresh concerns emerged after President Trump announced plans to reinstate a blockade on Iranian shipping through the Strait of Hormuz, a key global energy chokepoint.

Not everything was rosy, however. IBM shares plunged 25% after the company warned that second-quarter profits would fall short of expectations due to weak demand in its software and infrastructure businesses. Ouch.

Despite those headwinds, falling bond yields and renewed buying in Mega-Cap and AI-related stocks helped support the broader market.

The Mag 7 once again outperformed the other 493 stocks in the S&P 500, overcoming a rough start to the session and leading the major indexes higher.

The dollar also weakened, providing a tailwind for alternative assets. Gold surged back above the $4,000 level, while bitcoin rallied from roughly $61,000 toward $65,000, marking its highest level in three weeks.

There were plenty of crosscurrents for traders to navigate today, but the market handled them surprisingly well. The big question now is whether the upcoming earnings season can provide enough fuel to keep this rally moving higher.

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Oil Surge And Middle East Tensions Send Stocks Lower As Tech Leads The Retreat

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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Stocks opened sharply lower after President Trump announced that the U.S. was reinstating what he described as a blockade on Iranian shipping in the Strait of Hormuz, sending oil prices soaring.

In a series of posts on Truth Social, Trump said the U.S. would act as the “Guardian of the Hormuz Strait” and proposed a 20% fee on cargo shipments to cover the costs of securing the critical shipping lane.

The latest escalation follows a weekend of military exchanges between the U.S. and Iran.

While Tehran claimed it had closed the Strait of Hormuz after targeting U.S. facilities in several Gulf countries, Trump pushed back on that assertion, maintaining that commercial traffic through the waterway remains open.

For now, the market appears stuck in a trading range as investors wait for greater clarity from the Middle East. Semiconductor stocks took a heavy hit, dragging the broader tech sector lower, while bank shares also came under pressure ahead of earnings season.

Not surprisingly, the Nasdaq was the weakest of the major U.S. indexes, breaking below its 50-day moving average once again.

Meanwhile, bond yields moved higher as investors positioned themselves ahead of tomorrow’s closely watched CPI report.

The dollar initially sold off but quickly reversed higher, putting pressure on both gold and Bitcoin.

Gold managed to hold above the $4,000 level by the close, while Bitcoin slipped back toward $62,000. Rising expectations for additional rate hikes further dampened enthusiasm for precious metals and cryptocurrencies.

The recent rotation out of technology stocks remains one of the market’s key themes.

The big question now is whether this is simply a temporary shift in leadership before money flows back into growth stocks—or the early stages of a more cautious and bearish market environment.

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ETFs On The Cutline – Updated Through 07/10/2026

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (217 vs. 219 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For July 10, 2026

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

STOCKS STAY RESILIENT AS MARKETS LOOK PAST GEOPOLITICAL NOISE

[Chart courtesy of MarketWatch.com]

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Stocks took a breather early in the session following Thursday’s strong rally, but the major indexes still managed to grind their way to a modest gain by the close.

That keeps the S&P 500 on track for a nearly 1% gain this week, while the Nasdaq is pacing for a gain of more than 1%. The Dow has lagged somewhat, though it’s only modestly lower for the week.

Much of the recent strength has been fueled by easing concerns over the Middle East. Markets welcomed lower oil prices after reports that diplomatic efforts are underway to bring the U.S. and Iran back to the negotiating table.

Interestingly, traders have largely looked past the latest flare-up in tensions, suggesting that Wall Street remains more focused on economic fundamentals and corporate earnings than geopolitical headlines.

Technology stocks, particularly chipmakers, continue to provide leadership for the broader market. Optimism remains high that strong earnings growth and continued AI-related spending can support further gains and eventually broaden the rally beyond the tech sector.

One potential complication emerged from the latest inflation data. Core PCE inflation came in hotter than expected, with rising memory-chip prices playing a role.

That could make it harder for the Federal Reserve to justify near-term rate cuts, especially as surging data center demand continues to put upward pressure on certain technology-related costs.

Despite those concerns, the major indexes still closed slightly higher, while bond yields finished little changed.

In other markets, metals drifted modestly lower, although copper bucked the trend and finished in positive territory. Bitcoin also held firm, ending the day just shy of the $64,000 level.

Meanwhile, oil prices fell for a third straight session as traders appeared confident that the latest U.S.-Iran military tensions will remain short-lived.

That confidence seems somewhat at odds with President Trump’s recent statement that “the ceasefire is over,” highlighting the gap between geopolitical rhetoric and the market’s relatively calm outlook.

With stocks continuing to shrug off geopolitical risks and inflation concerns, will strong earnings momentum be enough to push the market to fresh highs?

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 07/09/2026

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ETF Data updated through Thursday, July 9, 2026

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— effective 5/20/2025

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +8.63% and remains in “Buy” mode, with our holdings being subject to our trailing sell stops.

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Falling Oil And Bond Yields Help Power Market Rebound

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Stocks moved higher right out of the gate, led by strength in semiconductor shares and aided by a pullback in oil prices, as traders looked past renewed tensions between the U.S. and Iran and focused on the broader market outlook.

According to U.S. Central Command, the U.S. conducted a second consecutive day of strikes against Iranian targets. The latest military action followed Tehran’s attacks on commercial shipping in and around the Strait of Hormuz, a key global trade route where traffic has already been disrupted.

Despite the escalating conflict, crude oil prices moved lower after President Trump indicated that Iran had reached out to negotiate a deal.

That marked a sharp shift in tone from recent comments, which included suggestions that negotiations may no longer be worthwhile and that the previous ceasefire arrangement between Washington and Tehran was effectively over following another round of attacks in the region.

For now, hopes for a quick return to normal export flows through the Persian Gulf appear increasingly uncertain. As a result, geopolitical risks remain elevated and could spark bouts of risk-off trading if tensions continue to escalate.

That said, the market’s attention remains firmly on earnings season and the ongoing AI-driven growth story.

Many traders believe those two factors could continue providing enough fuel to push equities higher, even in the face of geopolitical uncertainty.

Meanwhile, falling bond yields helped support stocks, while a weaker dollar boosted precious metals. Gold rebounded above $4,100, and bitcoin also caught a bid, climbing back toward the $63,000 level.

With investors seemingly shrugging off the latest military strikes and oil prices moving lower instead of higher, are the bulls showing remarkable resilience—or is the market becoming a little too comfortable with rising geopolitical risks?

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