The Dow Jones Industrial Average (DJI) is struggling around 45,000, with a chance of dropping to 43,950 or 43,850. Meanwhile, the Nasdaq 100 (NDX) reached a new peak of 22,896 on July 3, beating its prior record. Similarly, the S&P 500 (SPX) saw a new high of 6,284.85 last week. The DJI may show signs of a decline soon, as it previously peaked in December 2024 and tested that level again in January 2025. President Trump’s decision to delay the tariff deadline raises economic uncertainty. Economists expect global growth to slow down, particularly affecting the US. Many businesses are hesitant to invest because of this uncertainty.

July Seasonality Trends

Historically, July shows positive trends for stocks. Since 2006, the DJI has closed 2.3% higher 85% of the time in July. The NDX usually closes 3.4% higher, and the SPX often follows suit with a 2.3% increase. This information is not a recommendation to invest and can change at any time. Trading involves risks that can lead to losses, so consider your investment goals carefully. Always consult an independent investment advisor if you’re unsure. As the Dow hovers near 45,000, it lacks strong upward momentum. Breaking this level is challenging, and recent price movements indicate buyer hesitance. A pullback to the 43,950–43,850 area seems likely, as this region may provide temporary support. Given that the index peaked in December 2024 and faced resistance again in January, a short-term decline appears probable. In contrast, the Nasdaq 100 and S&P 500 have made impressive gains. The Nasdaq reached 22,896 on July 3, surpassing its previous record, while the S&P exceeded 6,284.85 last week. These new highs could draw both interest and caution. While sentiment remains optimistic, it is delicate; if markets rise too much based on inflated valuations, even small shocks could lead to significant drops.

Tariff Deadline Impact

Trump’s recent tariff deadline extension adds to the anxiety. The main concern is not just the decision itself, but what it signals: the trade landscape may not stabilize soon. Export-focused sectors might postpone decisions, and markets quickly reflect any hesitance. Economists now predict slower global growth, especially in developed economies like the US, which could pressure earnings estimates. As market volatility increases, seasonality data, while minor, still matters. Historically, July has been good for stocks. The Dow has ended the month higher in 85% of the years since 2006, typically gaining an average of 2.3%. The Nasdaq generally rises by 3.4% in July, and the S&P tends to perform similarly to the Dow. However, positive averages can hide significant variations, so expecting the same results each year is risky. How markets interpret trade news and earnings reports will heavily influence this month’s price movements. From a trading perspective, it’s important to stay agile. Monitoring trends in tech assets or weaker industrial performance can unveil short-term opportunities. Observing volatility, especially on days with unexpected news, is wise. Risk adjustment may happen swiftly. Implementing strict risk controls and employing spread strategies could help navigate this time effectively. If equity momentum slows or reverses, options may react faster than the underlying indices, presenting both risks and opportunities. Create your live VT Markets account and start trading now.

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