Stock Market Update Thursday July 25, 2024

Stock Market Update Thursday July 25, 2024 Equity markets exhibited volatility today, with an initial decline followed by a midday rally, ultimately succumbing to bearish pressure. The S&P 500 and Nasdaq 100 closed down 0.5% and 1.1%, respectively, while the Russell 2000 (small-caps) bucked the trend with a 1.2% gain.

Away From Stocks: The Treasury yield curve flattened, with the 2-year yield rising 4 basis points to 4.41% and the long bond yield declining to 4.5% from 4.54%. WTI crude oil prices edged above $78 per barrel, gold prices fell to $2,364 per ounce, Bitcoin dipped below $65,000, and the VIX volatility index remained elevated above 18. Reserve bank credit contracted by $9.7 billion over the past week, bringing the Federal Reserve's portfolio of interest-bearing assets to $7.166 trillion. This represents a $42 billion decrease since late June and a 19.7% reduction from its peak in March 2022.

This divergence between large-cap and small-cap indices suggests a shift in market sentiment favoring smaller companies, continuing the trend that started on July 11th with our proprietary algorithm's buy alert for the IWM ETF.