Today's US stock market summary: Geopolitical conflict escalates again, the market stages a dramatic rebound at the options wall

The Middle East ceasefire agreement collapsed, but the market has become desensitized. Trump is great, using tacos to push the market up.

Trump publicly stated that the ceasefire agreement with Iran has ended. The US military launched strikes on over 80 targets inside Iran, while Iran retaliated against US military bases in Kuwait and Bahrain, claiming it will retaliate at a ratio of at least 2 to 1. After the close, US Central Command confirmed the launch of a new round of strikes aimed at weakening Iran's threat to freedom of navigation in the Strait of Hormuz. Trump also said he is considering restoring a blockade of the Strait of Hormuz, and even not ruling out occupying Iran's core oil export hub, Kharg Island, and striking its seawater desalination facilities. Impacted by this, crude oil prices surged as much as 8% during the session, then retreated to around $74-$75.

The 30-year US Treasury yield also briefly spiked to 5.05%.

Looking at historical seasonal patterns, the VIX fear index usually accelerates its rise in the third quarter (especially in years with midterm elections or policy changes). However, today VIX closed with a long upper wick, indicating that the market has largely digested this information and sentiment has not spiraled out of control.

Market technicals: Three major index analysis

The S&P 500 (SPY) is currently about 1.98% off its all-time high, in a high-level consolidation pullback. Core support is in the 739-740 zone (the key intraday retest level; if breached, it could trigger accelerated selling). Below that, support lies at the strong 730-732 area, with deeper support at 727 and the mid-June double bottom at 722.50.

Above, resistance is near 746; if broken, there is a chance to retest the recent highs in the 750-752 range. Tomorrow's expected fluctuation range is roughly 750.51 to 740.29, with the weekly expected range upper bound at 755 and lower bound at 734.

For the Nasdaq 100 (Q), a notable bullish divergence signal has appeared. On the 1-hour chart, both MACD and RSI show a double bottom divergence, suggesting a potential short-term upside reversal. Tomorrow's expected fluctuation range is roughly 720.09 to 702.79. However, as a strategy, caution is still advised for short-term traders. For the S&P, one could tentatively go long on individual stocks, but for the Nasdaq, one must wait until the 722 resistance level is meaningfully recaptured before increasing position size—do not blindly go full long.

The Russell 2000 small-cap index (IWM) is the weakest of the three technically. On the daily chart, after touching the extreme range of the 2026 annual expected fluctuation, a triple top divergence signal has been confirmed, indicating a mid-to-short-term top is forming, facing a deep weekly-level correction risk. The 1-hour structure is also quite weak. Unless there is an extreme short squeeze, the overall trend is biased downward or facing resistance on bounces. Combining IWM's topping and pullback with Q's oversold bottom divergence, the market may be experiencing a rotation of funds from small caps back into the Nasdaq and tech giants. Tomorrow's expected fluctuation range: upper 296.51, lower 290.45. The rising wedge has already broken; watch for a retest of the breakdown level to short.

Negative correlation between energy and financials, and the ripple effect of Treasury yields

International crude oil prices surged, driving the energy sector (XLE) to buck the trend and rise nearly 1.8%. However, the rise in energy directly suppressed the broader market and the financial sector (XLF plunged nearly 2%), with the negative correlation between energy and financials, and energy and S&P futures, clearly evident today.

At the same time, the 10-year US Treasury yield spiked to a 5-year high range, directly dragging down Treasury ETFs (TLT) and real estate indices sharply. However, TLT's current decline has already broken through the weekly expected fluctuation range and entered oversold territory. With the view that yields are peaking, one could cautiously build a small TLT long position for an oversold bounce.

From the market environment matrix and gamma structure, we are currently transitioning from an absolute bull market to a neutral phase. The S&P's gamma flip line is around 7,450, with a heavy gamma concentration zone at 7,500. Once the index breaks below the 7,450 flip line (currently the bulls' defense is quite strong), market makers will enter a negative gamma state, and volatility (VIX) will be rapidly amplified. This is a technical risk point to watch closely.

Macro liquidity: Surface calm, undercurrents churning

Although the major indices appear relatively stable, there is intense sector rotation occurring within the market.

The good news is that liquidity still has support. Despite inflation concerns, the M2 money supply posted its largest monthly increase in 5 years, and overall market leverage remains at historical lows, with no signs of a systemic leverage crisis.

The S&P Fear & Greed Index has been in the fear zone for a month straight. This pessimistic sentiment itself is a characteristic of the market gradually bottoming out.

Fed minutes: Hawk-dove divergence intensifies, but rate hike probability this year is low

The latest Fed meeting minutes show that internal hawk-dove divergence has sharply intensified, with both sides evenly matched. Doves believe that as tariff and geopolitical risks gradually ease, inflation will moderate. Hawks worry that the economy itself remains strong, and that AI investment-driven demand for electricity, semiconductors, and tech products will push up inflation. If inflation stays elevated, reopening the possibility of rate hikes is not ruled out. My personal judgment is that standing pat this year is more likely, with a limited chance of actual rate hikes.

Structural reminder: This is a range-bound market; chasing upside breakouts can easily backfire

The broader market is currently in a trading range. Chasing sectors that appear to break upward (like Dell today, or some cybersecurity/defensive sectors) can easily lead to false breakouts quickly retracing. Therefore, blindly chasing highs is not recommended.

A more prudent approach is to wait for prices to return to institutionally heavy support levels. For example, the semiconductor and storage sectors (SanDisk, Micron, Western Digital, Seagate) showed strong buying support after pulling back to the EMA 50 or 55—key institutional support levels—indicating that the institutional position logic has not changed.

Tech giants' capex willingness also remains firm. Amazon issued $28 billion in bonds to boost capex (breaking the bearish rumor of computing power surplus and capex cuts). Meta is investing $10 billion in Canada to build data centers, indicating that underlying demand for cloud computing and AI hardware remains solid.

Individual stocks: Nvidia surges against the trend; key levels worth noting for a few names

Nvidia's forward P/E has fallen below 20x, indicating that fundamental earnings growth has outpaced stock price movement. Benefiting from news that China's top AI companies have been allowed to purchase H200 chips, Nvidia surged against the trend, reclaiming the $200 level, significantly outperforming the broader market. If it can hold above $200, it may challenge the 208-210 range.

The forward P/E of the Magnificent Seven has also fallen to around 23x, with their valuation premium over other S&P 500 components narrowing to about 15%, a relative low in the past decade. This suggests these giants are now somewhat attractive again.

Apple is currently in a high-level bullish flag consolidation pattern. Watch for a potential pullback to the 20-day moving average (around $300) before considering entry. Penguin Solutions reported revenue and guidance that both beat expectations, with volume-driven gains. It is now in a strong linear upward channel, breaking above the prior high of $77. If it can break and hold above $81 at tomorrow's open, a chase may be considered. The earnings report is very strong and significantly beat expectations.

Tesla and Amazon have both broken below their 50-day and 200-day moving averages, showing an ugly technical structure and dragging down consumer and tech sectors. For Tesla, wait to see if it forms a double bottom near $370 to stop the decline.

For Amazon, the 233-240 range below is support. If it retests this zone again, consider going long.

For ANET, the wedge pattern has completed a breakout and it has also made a new high. The underlying logic is speculated to be related to the delay in CPO optical module technology. Over the next few years, a large amount of AI network traffic will still depend on traditional Ethernet architecture, and ANET's earnings certainty is significantly higher than many semiconductor companies, generating ample cash flow just from selling switches. The next resistance level is $192; above that, look to $200+. It would be more comfortable to enter after a breakout retest of $177-$178.

Energy ETF (XLE) is driven by the crude oil rebound, outperforming the broader market. It is currently oscillating around $55.60, with the year's high near $64. It serves as a short-term safe-haven play.

Alibaba surged over 11% today. Drivers include pre-earnings optimism over cloud business profitability improvement (some major banks expect cloud revenue growth to hit 45%), and a US judge suspending the executive order that listed Alibaba as a Chinese military company. Essentially, it had fallen too much, and this is a short-covering rebound.

SK Hynix lists in the US; strong institutional subscription demand

SK Hynix listed in the US, with market reports indicating oversubscription and attracting significant interest from well-known institutions. Attention on the storage line will continue to intensify in the short term.

Summary

The core contradiction today was the simultaneous occurrence of sudden geopolitical escalation and a fierce technical market rebound. The conflict between Iran and the US military caused violent swings in crude oil and Treasury yields, but the S&P and Nasdaq found strong support right at the key option wall. Combined with Treasury auction data bringing yields down, it resulted in a textbook intraday reversal.

The market is currently in a transition phase from bull to neutral. Chips and storage found institutional support at key moving averages, and cloud capex intentions remain strong, indicating that the industry logic has not been broken. However, small caps have shown topping signals, and the Nasdaq needs to recapture key resistance to confirm a bullish structure.

Most of today's discussion is about short-term logic. The long-term bullish view remains unchanged until the end of next year.