On Tuesday, July 15, U.S. equity markets showed visible signs of fatigue near record highs. The S&P 500 opened higher but reversed to close near session lows, forming a full-body bearish candle and ending a four-day winning streak, down 0.40% at 5,297.1. Although the Nasdaq Composite eked out a marginal gain of 0.18% to close at another all-time high of 20,836.1, intraday price action revealed a weakening bullish impulse and growing investor caution around the risk of a near-term pullback.
1. First Bearish Signal on the S&P 500: Start of a Correction or Just Consolidation?
The S&P 500’s recent price action has grown increasingly indecisive. After four consecutive positive closes, the index formed a small-bodied bearish candle on July 15 — a "full-body red candle" characterized by an open near the high and close near the low. While the absolute decline of just 24.8 points was modest, the candlestick formation is often interpreted by technical traders as a preliminary warning at extended levels.
That said, broader technical conditions remain constructive. The Nasdaq printed another new high, and both indices continue to trade above upward-sloping moving averages with volume and momentum confirming the trend. From a historical perspective, a single bearish session rarely signals a trend reversal. Rather, a confirmation would require consecutive negative closes or a large bearish engulfing candle at the top.
Market takeaway: The uptrend remains intact, but buying momentum is slowing. Investors should avoid aggressive chasing at current levels. Existing long positions can be held, while new entries should be more selective and risk-aware.
2. June CPI Reaccelerates: Inflation Back in Focus, Rate Cuts at Risk
The macro spotlight was squarely on the June CPI report — and it didn’t disappoint in terms of impact.
- Headline CPI rose 0.3% MoM, marking the highest monthly gain since February, and climbed to 2.7% YoY (vs. 2.4% in May).
- Core CPI (ex-food and energy) increased 0.2% MoM, up 2.9% YoY, well above the Fed’s 2% inflation target.
The inflation uptick was driven by surging rents, rebounding gasoline prices, and rising costs of tariff-sensitive consumer goods such as appliances (+1.9%), clothing (+0.4%), sporting goods (+1.4%), and toys (+1.8%) — indicating that import tariff costs are beginning to pass through to consumers.
Looking ahead, economists warn that the full inflationary impact of recent tariff measures may materialize more visibly in the coming months, creating further upward pressure on CPI. This dynamic underscores the Fed’s hesitancy to move on rate cuts, as easing policy amid re-accelerating inflation risks credibility.
Market reaction: Equities softened post-release but did not panic. Fed Funds futures still price in a 97.4% probability of no rate change in July, and a 53.8% chance of a 25 bps cut in September — though this outlook is becoming increasingly data-dependent.
3. U.S.–China Tech Thaw & Nvidia Catalysts: Spotlight on CRWV
One of the most notable developments in the tech space was the easing of export restrictions for Nvidia and AMD:
- Nvidia received approval to resume shipments of its H20 chips to China, while AMD is on track to deliver its M308 chips pending final clearance — potentially recovering over 10 billion yuan in lost China market share.
- Meanwhile, CRWV, an AI data center company backed by Nvidia (5.04% ownership), announced a new $6 billion expansion project using Nvidia hardware — signaling deepening strategic alignment. The correlation between Nvidia’s investments and CRWV’s stock price is becoming a key theme for AI-focused investors.
In parallel, U.S.–China trade negotiations showed signs of flexibility. Top officials may delay the August 12 deadline and schedule a bilateral meeting in a third country in early August, even as the U.S. threatens further tariffs on major importers like Mexico and the EU.
4. Bank Earnings Diverge: JPMorgan Mixed, Wells Fargo Slumps, Citigroup Surprises
Earnings season kicked off with major U.S. banks reporting results — with highly divergent reactions:
- JPMorgan Chase (JPM) beat on both revenue ($45.7B) and EPS ($5.24), but shares faded on weak yield appeal — its dividend yield stands at just 1.76%, a concern for income-focused investors like Warren Buffett.
- Wells Fargo (WFC) saw net income rise 12% QoQ and beat EPS expectations. However, its guidance that net interest income in 2025 may be flat triggered a sharp 5.48% selloff, as investors repriced forward earnings growth.
- Citigroup (C) delivered a clean beat and announced a sizable $4 billion buyback for Q3 — more than its total repurchases in H1 — sending shares up 3.68%.
5. Crypto Legislation Stalls: Pullback or Smart Money Shakeout?
The crypto market came under pressure as three major digital asset bills — including the high-profile “Genius Act” — failed to pass in Congress (196 in favor, 223 against).
- Key opposition stemmed from the bills’ failure to explicitly prohibit the Federal Reserve from issuing a central bank digital currency (CBDC). Future revisions could reintroduce the bills, similar to the evolution of the "America COMPETES Act."
- Interestingly, JPMorgan CEO Jamie Dimon, a vocal crypto skeptic, announced plans to explore a stablecoin project — aiming to preserve market share in blockchain-based settlements, where traditional systems like ACH and SWIFT fall short on cost and speed.
Some analysts believe the sell-off in crypto-related equities (e.g., Coinbase) may have been a liquidity-clearing eventahead of a longer-term regulatory tailwind. MSTR and ESBIT, heavily tied to Bitcoin and Ethereum reserves respectively, continue to trade on underlying crypto sentiment rather than fundamentals — reinforcing the speculative nature of crypto-equity plays.
6. Tesla’s India Entry Hits a Wall: Model Y Deemed a Luxury Good
Tesla has officially launched its first store in India — but faced immediate consumer backlash. Its Model Y is priced at $70,000 in India vs. $45,000 in the U.S., due to 70%-100% import tariffs on foreign EVs, classifying the vehicle as a “luxury good” out of reach for most Indian buyers.
Technically, Tesla stock remains trendless and range-bound, with no immediate catalyst. Trade policy and global tariff regimes remain key overhangs for global automakers.
Conclusion: High Altitude Demands Caution
The overarching message from markets this week is clear: U.S. equities remain at elevated levels, but momentum is stalling. Inflationary pressures threaten the rate cut narrative, geopolitical and trade risks persist, and crypto regulation remains unresolved.
For investors, this is a time for discipline over speculation. Avoid chasing breakouts, hold quality positions with strong fundamentals (e.g., AI, data infrastructure), and be patient for better-defined entry points. Whether it’s waiting for the S&P to absorb its pullback, the Fed’s September decision, or crypto policy clarity — in high markets, patience is your best edge.
