Sunday Post - Recap & Week Ahead 8/17/2025
Stock Market Analysis & Insights, Charts and Levels
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The US stock market finished the week modestly higher, led by a rebound in small-caps and strength in select sectors, even as breadth weakened into Friday and gains remained narrowly concentrated. Major benchmarks notched record closes earlier in the week before cooling, while volatility edged lower and Treasury yields ticked higher as safe-haven demand eased.
S&P 500 rose 0.9% to close at 6,449
Nasdaq gained 0.8% to end at 21,623
Dow Jones advanced 1.7% to finish at 44,946
Russell 2000 surged 3.1%, closing at 2,687
Sector performance was mixed: Health Care led with a 4.65% gain, followed by Retail (+3.47%) and Consumer Discretionary (+2.35%). Financials (+1.18%), Energy (+0.74%), and Semiconductors (+0.72%) also advanced, while Technology (-0.08%) and Industrials (-0.26%) slipped. Market breadth was weak: on the NYSE, decliners outpaced advancers by a 2.29-to-1 ratio; on the Nasdaq, decliners led by a 2.14-to-1 margin, reflecting a rally concentrated in select areas despite broader softness. The VIX slipped 0.40% to 15.09. Investor sentiment showed a similar split: AAII bullish sentiment pulled back to about 29.9%, while the CNN Fear & Greed index remained in the Greed zone near 64.
Bond yields rose modestly: the 10-Year yield ended at 4.33%, while the 30-Year closed near 4.92%. Gold eased slightly to $3,335/oz, WTI crude settled lower near $63.1/barrel, and Bitcoin reversed lower, finishing around $117,446. US-listed spot Bitcoin ETFs posted small net outflows of roughly $14 million on Friday, with inflows into BlackRock’s IBIT offset by outflows in other funds.
Overall, it was another headline-strong but internally narrow week: benchmarks pushed higher, small-caps outperformed, volatility held steady, yields edged up, commodities softened, and Bitcoin flows showed a mixed picture.
Small-cap stocks, which are more sensitive to interest rates due to their higher reliance on debt financing, rose over 3% for the week. Historically, the performance of small-caps has shown a strong relationship with small business sentiment as measured by the NFIB Small Business Survey. The chart below illustrates that the annual rate of change in the NFIB index (black line) tends to move in tandem with the year-over-year performance of the Russell 2000 (orange line). Periods of rising confidence among small business owners often coincide with upward momentum in small-cap equities, while downturns in sentiment frequently precede or accompany weakness in the Russell 2000. This correlation underscores the NFIB index’s value as a forward-looking indicator for investors in this market segment, as shifts in business confidence can provide early signals about the trajectory of small-cap performance.
h/t: IsabelNet
The ES market made another all-time high, once again testing the overhead resistance that aligns with the prior upward channel originating from the October 2023 low (blue dashed lines). On the previous attempt, this resistance was rejected, leading to a selloff toward the broader channel support that has been in place since the April lows. I have adjusted the channel to reflect the new high. The coming week will be critical in determining whether the rally can break through this resistance and extend into new record territory, or if a rejection will trigger a break of the channel support. See the daily chart below.
As usual, I will do a brief recap of this week´s market action, followed by an analysis of the general markets and the various sectors, and conclude with an outlook for the upcoming week.
Recap:
Early in the week, the key support area highlighted in the plan was not breached, fulfilling a critical requirement for the Bullish case outlined in the previous Sunday Post. The Bulls successfully defended this range, sustaining upward momentum and driving the market higher. Most of the upside targets were reached, with the rally topping out at the second-to-last target for the week. This peak aligned with the prior upward channel originating from the October 2023 low, as shown in the daily chart above. On Wednesday, this resistance was rejected, prompting a pullback. In the final days of the week, the market stalled and consolidated, forming a 3-Day Balance.
General Markets and Sectors:
Check out the updated Charts Page which goes with this section.
The S&P 500 rallied, breaking above the 6427 resistance to set a new all-time high. This level aligns with the upward channel resistance originating from the March 2020 low.
The NDX/Nasdaq bounced off the 23478 support level, which aligns with the upward channel resistance from the December 2022/January 2023 lows (dashed black lines) and made another all-time record high.
The Dow Jones defended the 43730 support/daily 50 MA and rallied to the 45014 resistance, which aligns with the all-time high. It did move above this level briefly but reversed lower.
Small Caps (IWM) rallied and broke above the key 227 resistance level. However, this area was back-tested on Friday, so let´s see if it holds.
The FFTY index moved higher right to the upward channel resistance from the October 2023 low, which was then rejected.
The $VIX made a new YTD low, making it technically weaker which reflects a generally Bullish environment for equities. However, notice the Bullish divergences from the technical indicators on the daily chart.
Crude Oil sold off & is near the back-test of the downward channel from the March 2022 high, which could act as support. Resistance is now at the $67 level & the daily 200 MA/50MA. It is quite a choppy market.
Gold has been in consolidation mode since April and recently it has been basing between the 3424 resistance & the 3288 support. It remains in the upward channel from the February 2024 low.
The US 10-Year rebounded from the 4.21% support one more time. Resistances are at the 4.40% level and the daily 50 MA/200 MA. It remains in the downward channel from the October 2023 high.
The USDJPY has been consolidating between the daily 50 MA and the 148.50 resistance level.
Bitcoin rallied toward the upward channel resistance from the October 2023 low and was quickly rejected, moving lower to the 116025 support/daily 50 MA.
Semis, SOX rallied to the all-time high area and got rejected. It remains in the upward channel from the October 2022 low.
Consumer Disc, XLY rallied to the upward channel resistance from the December 2022 low and moved slightly above it.
The Retail sector, XRT rallied to the upward channel resistance from the September 2022 low and broke above it. However, it fell back to this resistance on Friday.
The Tech sector, XLK made another all-time record high, which is right above the upward channel resistance from the October 2022 low.
Transports, IYT bounced off the daily 50 MA and 200 MA. It remains in the upward channel from the October 2023 low.
Financials sector, XLF has been consolidating above a prior long-term resistance trendline since late June, and the daily 50 MA has held as support. It remains in the upward channel from the October 2023 low.
The Materials sector, XLB has been consolidating around both the daily 50 MA and 200 MA. It remains within a long-term upward channel.
Industrials, XLI consolidated above the daily 50 MA. It remains in the upward channel from the March 2020 lows.
The Health sector, XLV has been in a wide-ranged consolidation since April and remains in the downward channel from the September 2024 high. It has moved back above the daily 50 MA.
Consumer Staples, XLP has been rangebound since mid-April and the upward channel support from the October 2023 low was defended.
Utilities, XLU consolidated above a prior long-term resistance trendline (now support). It remains in the upward channel from the October 2023 low.
The Energy sector, XLE continues to fluctuate around the daily 200 MA and the 50 MA. It has been rangebound for over two years (shaded area).
YEAR-TO-DATE RETURN:
IXIC Nasdaq +12.4%
SPX S&P 500 +10.5%
DJIA Dow Jones +6.7%
XLI U.S. Industrials Sector: +14.9%
XLU U.S. Utilities Sector: +14.7%
XLK U.S. Technology Sector: +14.7%
SOX Semiconductor Index: +14.5%
XLF U.S. Financial Sector: +9.3%
XLB U.S. Materials Sector: +8.0%
XLP U.S. Consumer Staples Sector: +5.6%
XRT U.S. Retail Industry: +5.5%
IYT Dow Jones Transports: +5.0%
XLY U.S. Consumer Disc Sector: +2.6%
XLE U.S. Energy Sector: +1.5%
XLV U.S. Health Care Sector: -0.1%
Week of 8/18/2025:
Click link for complete Economic Calendar.
United States - FOMC's minutes, NAHB housing prices, building starts, and new and existing home sales. Also, policymakers from central banks will speak at the Fed's Jackson Hole Symposium
S&P PMIs - US, Eurozone, UK, Japan, Australia, and India.
Key price - UK, Canada, Japan, and South Africa.
Rate decisions - China, Sweden, New Zealand, and Indonesia.