Tech keeps traders off balance
- S&P 500 pulls back as chip volatility weighs on tech
- Oil falls below $70, gold tests $4,000, crypto falls
- This week: jobs report, Warsh speech, Fourth of July
It didn’t appear to matter last week that oil prices tumbled to a nearly nine-month low, that US-Iranian negotiations (as of Friday) hadn’t imploded, that Q1 economic growth was stronger than estimated, or that inflation, while still high, was essentially in line with forecasts.
Instead, continued AI-related tech volatility—specifically, sharp swings in the semiconductor space—dominated day-to-day market action. The S&P 500 (SPX) dropped sharply last Tuesday as memory chipmaker Micron (MU) led a semiconductor sell-off (a day before its after-hours earnings release), but also closed fractionally lower on Thursday despite MU’s strong post-earnings rally:
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest in an index.)
The headline: Tech volatility continues.
The fine print: Contrary price swings in two high-profile tech stocks last Thursday illustrated the two sides of the theme that has recently dominated the tech sector—the “memory crunch.” Memory supplier MU rallied 15.7% after its earnings beat, while memory consumer Apple (AAPL) fell 6.1% after announcing it was raising prices on some of its products—because of surging memory and storage costs.
The move: Since June 5, only five of the PHLX Semiconductor Index’s (SOX) 15 daily gains or losses were smaller than +/-3%—the only time that has happened in at least five years. Last week’s daily returns were +2%, -7.9%, -0.2%, +3.6%, and -5.3%.
The numbers: Last Thursday, Q1 GDP was revised up to 2.1%, while the core PCE Price Index showed year-over-year inflation at 3.4%—only slightly higher than forecasted. Ellen Zentner, Chief Economic Strategist for Morgan Stanley Wealth Management, noted firm economic growth and sticky inflation isn’t a recipe for lower interest rates: “Sliding oil prices will take a while to work their way through the economy. Today’s data is a reminder that inflation remains well above target and growth remains solid. This will keep the Fed on hold for quite some time, until conditions allow for a cut.”
The scorecard: The indexes with the least exposure to tech performed best last week. The Russell 2000 (RUT) small-cap index leap-frogged the Nasdaq 100 (NDX) tech index as the year-to-date-leader:
Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)
S&P 500 sector returns: The strongest S&P 500 sectors last week were health care (+7.6%), real estate (+3.9%), and utilities (+3.5%). The weakest sectors were communication services (-6.1%), tech (-5.1%), and consumer discretionary (-2.9%).
S&P 500 stock movers: Last week’s biggest gains were Bio-Techne (TECH) +23% to $71, AbbVie (ABBV) +17% to $253.35, Charles River Laboratories (CRL) +17% to $215.75. The biggest losses were ON Semiconductor (ON) -25% to $90.65, Western Digital (WDC) -21% to $586.45, Oracle (ORCL) -19% to $148.53.
Yields and the dollar: The 10-year US Treasury yield fell 0.08% to 4.37% last week. The US Dollar Index (DXY) climbed 0.51 to 101.36 despite a Thursday-Friday pullback.
Commodity futures: August WTI crude oil (CLQ6) posted its second-biggest weekly decline of the year, falling 8.7% ($6.62) to $69.23. August gold (GCQ6) bounced after closing at its lowest level in nearly nine months last Wednesday, but still ended the week down 3.5% ($149.60) at $4,096.30. Biggest gains: September cocoa (CCU6) +20.3%, September rough rice (ZRU6) +8.3%. Biggest declines: July silver (SIN6) -10.7%, September Brent crude oil (BU6) -8.7%.
Crypto: Bitcoin -4.6% to $60,016.43 last week, Ethereum -7.8% to $1,576.62.
Coming this week
●Tuesday: S&P Case-Shiller Home Price Index, FHFA House Price Index, Chicago PMI, Job Openings and Labor Turnover Survey (JOLTS), Consumer Confidence
●Wednesday: Fed Chairman Kevin Warsh speech, job cuts, ADP private employment, ISM Manufacturing Index, Construction Spending
●Thursday: Employment Report, Factory Orders, vehicle sales
●Friday: US markets closed for July 4th holiday
This week’s earnings include:
●Monday: AeroVironment (AVAV), Concentrix (CNXC), Quantum (QMCO)
●Tuesday: Nike (NKE), Constellation Brands (STZ)
●Wednesday: General Mills (GIS), MSC Industrial Direct (MSM), UniFirst (UNF)
●Thursday: Lindsay (LNN)
●Friday: US markets closed for July 4th holiday
This week’s IPOs include: ITG (ITG), Bending Spoons (BSP), Lime (LIME)
Trading around Independence Day
The following chart shows the SPX’s median returns for the four trading days before the Fourth of July market holiday and the five trading days after it, from 1957-2025:
Source: Power E*TRADE Pro. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest directly in an index.)
Three of the four days preceding the holiday had median returns of 0.25% or more vs. only one of the five days following it. The first day after the holiday was the only one with a negative median return, and the only one to close down more often than up (36 vs. 33, or 52% of the time).
Tomorrow’s Active Trader Commentary will share more details about July’s historical performance.
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1 All figures reflect S&P 500 (SPX) daily closing prices, 1957-2025. “July 4th market holiday” refers to the day the US markets are closed, not July 4th. Supporting documents available upon request.