Weekly Market Recap (Aug 3-7): Patience Pays Off as the S&P 500 Breaks to New Highs

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Here are this week's highlights and what to look out for next:

1. Performance Recap: a winning week across the equity markets: S&P 500 (3.6%), Nasdaq (5.2%), Dow Jones (3%). Sector leaders: Technology (+7.2%) and Materials (+4.8%).

2. Momentum Pulse Check: S&P 500’s long-term trend is strong and so is the short-term momentum. Next resistance: 7,800; support: 7,620.

3. Earnings Update: 436 S&P 500 companies reported Q2 2026 earnings with 85% topping estimates. Q2 earnings growth: +51%, full-year 2026 outlook: +33%.

4. Sentiment Check: CNN Fear & Greed at 64/100 (Greed); VIX was down 7% to 14.9.

5. Next week’s agenda: Earnings from Applied Material and Cisco. CPI, PPI reports; Retail Sales data.

📌 My Take:

The past two weeks serve as a good reminder that there is no need to turn overly bearish during a short-term consolidation, as long as the broader long-term momentum structure remains intact. The two-month sideways grind was tough to navigate, with some painful volatility and pullbacks along the way. But these periods always resolve with a strong directional move, and my bias is for trend continuation.

But I always let the price action confirm my bias, and as I mentioned last week, what I needed to see was a multi-day rally that would clear key resistance. We got exactly that. The S&P 500 carried last week’s momentum straight toward record highs. Markets rarely move in a straight line, but the recent price action suggests there may be more room in this leg, with 8,000 as the next area to watch.

This week: 8 of the 11 sectors advanced. Technology (7.2%) was the best performer, while Energy (-3.4%) was the weakest.

Year-to-date: 10 sectors are positive. Technology (30.6 %) is the leader, while Communication Serv. (-5.5%) is the laggard.

Over the last five trading days, 70% of S&P 500 stocks closed higher.

Top Performers:

• $COHR (Coherent Corp.): 44.2%

• $PLTR (Palantir Technologies Inc.): 39.8%

• $ZBRA (Zebra Technologies Corporation): 28.1%

• $LITE (Lumentum Holdings Inc.): 24.7%

• $IT (Gartner, Inc.): 22.9%

Worst Performers:

• $TPL (Texas Pacific Land Corporation): -15.4%

• $HONA (Honeywell Aerospace Inc.): -18.5%

• $WDC (Western Digital Corporation): -20.3%

• $DVA (DaVita Inc.): -23.5%

• $TTD (The Trade Desk, Inc.): -23.5%

This week, 57 S&P 500 stocks hit new 52-week highs, while 7 stocks fell to new lows.Financials stood out, contributing 14 of this week’s new highs.

Notable new 52-week highs:

• $AMZN (Amazon.com, Inc.)

• $BRK.B (Berkshire Hathaway Inc. New)

• $JPM (JP Morgan Chase & Co.)

• $BAC (Bank of America Corporation)

• $GE (GE Aerospace)

Notable new 52-week lows:

• $APP (Applovin Corporation)

• $PEG (Public Service Enterprise Group Incorporated)

• $CCI (Crown Castle Inc.)

• $NRG (NRG Energy, Inc.)

• $ROL (Rollins, Inc.)

📌 My take:
Momentum was strong across the board last week, with around 70% of S&P 500 stocks finishing higher. The rally was led by the Technology sector, but broad participation across the market was another encouraging sign.

(1) Performance: positive short-term performance, and trading at short distance form 1-year high.

• 1-month performance: +2.9%

• 3-month performance: +5.7%

• Distance from 52-week high: -0.1%

(2) Breadth: positive breadth reading.

Breadth measures how many stocks are joining the move. Extreme readings (>80% or <20%) often signal overbought/oversold conditions and serve as early warning signs of a trend reversal.

• % of stocks above 200-day moving average: 72% (up from 66% last week)

• % of stocks above 20-day moving average: 65% (up from 53% last week)

(3) Trends: strong long-term and short-term uptrend.

I analyze trend strength using exponential moving averages (EMAs) and score them on a 1-5 scale. A score of 3+ indicates a healthy trend worth riding.

• Weekly chart (long-term/position):

Strong Uptrend ⭐⭐⭐⭐⭐, Status: Stable

• Daily chart (mid-term/swing trade):

Strong Uptrend ⭐⭐⭐⭐⭐, Status: Stable

4) Key levels:

Critical price zones that either confirm the current trend or warn of a potential reversal.

Support (downside zones to watch)

• 7,310 (-5.8%)

• 7500 (-3.3%)

• 7,620 (1.8%)

Resistance (upside hurdles)

• 7,800 (+0.5%)

• 8,000 (+3.1%)

📌 My take:
A nice breakout to new all-time highs following a two-month consolidation. This appears to mark the start of the next leg higher, with the 8,000 level now looking like a realistic upside target, provided the breakout holds.

Each week, I select a specific theme and run the entire framework to pinpoint where the momentum lies.

This week, the theme is the Mega Caps. Momentum on mega caps has improved significantly, with a growing number of names now in clear uptrends, including an impressive turnaround in $MSFT. That said, many of these leaders are already becoming extended, so I don’t think this is the time to chase them. I also like to keep an eye on the bottom of the rankings for potential recovery stories, but just too early for $WMT, $TSLA, and $META.

I selected a name with recently reported earnings and ran it through the full Momentum Pulse Check to assess the implications for long-term positions. This week: Apple ($AAPL).

My View → HOLD

After a strong run, last week’s post-earnings selloff looked concerning at first, but it has done little damage to the broader trend structure. The pullback has simply brought the stock back to its rising 9-week EMA, a trendline that leading stocks often revisit during healthy uptrends.

The stabilization we’ve seen this week also suggests the bulls haven’t dropped the ball just yet and remain broadly in control. The key now is to see whether the stock can bounce from this support level and resume its uptrend, or whether it will need a deeper or longer consolidation before making its next move.

The full breakdown (trend score, key levels, and implications) is available in this Substack Note.

This analysis is built using my Momentum Pulse Check, a tool I use to assess trend and momentum across markets.
Paid subscribers can access the tool to explore the same signals and context in real time.

It was another busy week for economic data, but the July Job Report stole the spotlight. The report came in much weaker than expected, with the U.S. economy unexpectedly losing jobs for the month. Wage growth also slowed, while the unemployment rate edged lower. Overall, the report reinforced signs that the labor market is cooling, potentially giving the Fed more room to ease policy later this year.

Key reports:

• ISM Manufacturing PMI (Jul): Actual: 55.6, Forecast: 54.0, Previous: 53.3

• ISM Non-Manufacturing PMI (Jul): Actual: 54.1, Forecast: 54.5, Previous: 54.0

• Average Hourly Earnings (MoM) (Jul): Actual: 0.1%, Forecast: 0.3%, Previous: 0.3%

• Nonfarm Payrolls (Jul): Actual: -23K, Forecast: 85K, Previous: 20K

• Unemployment Rate (Jul): Actual: 4.1%, Forecast: 4.2%, Previous: 4.2%

• Q2 2026 Earnings: S&P 500 earnings expected to grow +51% year-over-year (+47% when excluding Energy).

• 2026 Full-Year Outlook: Consensus forecasts +33% growth, largely above the 10-year average of +9 %.

• Analyst Revisions: 68% of all revisions in the past month have been upward.

• Valuation: Forward 4-quarter P/E ratio stands at 20.5, above both the 5-year and 10-year historical averages.

Out of the 436 S&P 500 companies that have reported Q2 2026 earnings, 85% exceeded EPS expectations, above the four-quarter average of 80% and above the historical average of 67%.

Below are some notable companies that reported last week, along with their EPS/revenue performance vs. estimates and weekly stock returns.

One highlight this week: Palantir ($PLTR). The stock jumped nearly 40% after delivering a standout Q2 2026 earnings report. The rally was fueled by explosive growth in its U.S. commercial AI business, along with a significant increase to the company's full-year revenue guidance.

📌 My take:
Blockbuster earnings from Palantir helped lift market sentiment early in the week. Even Friday's weaker-than-expected jobs report failed to derail the rally, as the softer labor market data may pressure the Fed to avoid further policy tightening.

Sentiment indicators offer a window into the views of professional and retail traders. While not predictive on their own, they complement technical and fundamental analysis, helping to assess the market’s predominant sentiment.

The VIX, or volatility index, measures expected volatility over the next 30 days using option prices. It is often called the “fear gauge” because it rises during uncertain times, when investors anticipate larger swings.

Current reading: 14.9, a low value, and down 7% from last Friday.

This index combines seven market indicators to score investor sentiment from 0 (Extreme Fear) to 100 (Extreme Greed).

Current reading is 64 (Greed), up from 43 a week ago.

The Bank of America Bull & Bear Indicator is a contrarian tool that tracks global investor sentiment and market positioning. The indicator combines six factors, including positioning, fund flows, and various liquidity and risk metrics.

The scoring system was updated in December 2025 and ranges from 0 (extreme fear, buy signal) to 10 (extreme greed, sell signal), with >8.0 as “sell” territory and <2.0 as “buy.” I see this as a longer-term indicator.

Current reading: 9.4 an extreme bullish signal, and typically a contrarian “sell” signal.

source: https://x.com/neilsethinew

📌 My take:
Volatility remains low, while the CNN Fear & Greed Index has climbed back into Greed territory. That's not necessarily bearish, but after last week's strong rally, it does suggest the market may be due for a pause to digest those gains before attempting another leg higher.

It's another inflation-focused week for markets. CPI and PPI reports come out first, followed by Retail Sales, giving investors a clearer picture of price trends and how consumers are holding up.

Key reports:

• CPI (YoY) (Jul): Previous: 3.5%

• CPI (MoM) (Jul): Previous: -0.4%

• PPI (MoM) (Jul): Previous: -0.3%

• Retail Sales (MoM) (Jul): Previous: 0.2%

• Core Retail Sales (MoM) (Jul): Previous: -0.2%

The earnings season continues next week, with 12 S&P 500 companies set to report their quarterly results.

Below are notable stocks reporting earnings next week, along with my Momentum Pulse Check snapshot and implied volatility for the upcoming week.

In particular, I will keep a close eye on Applied Materials ($AMAT). As the world's leading semiconductor equipment manufacturer, its earnings will provide another important read on AI infrastructure spending, chip demand, and the broader health of the semiconductor sector. Market is pricing a 10% move next week.

📌 My take:
Earnings season continues with a few notable Tech names still set to report, but the market's attention will increasingly shift back to macroeconomic data. This week's inflation and Retail Sales reports will be closely watched, especially after the Fed's recent hawkish messaging, as they could significantly influence expectations for the next policy meeting.

Each week, I highlight another Substack publication that offers valuable insights, fresh perspectives, or a helpful approach. This week, I’m pleased to feature Nick | CompoundingAlpha

In a market obsessed with short-term price action, next quarter’s earnings beats, and the latest fleeting trends, it is easy to lose sight of what actually drives long-term wealth: owning exceptional businesses at rational prices.
CompoundingAlpha is dedicated to cutting through the daily financial noise. This publication is built on the premise that rigorous fundamental analysis, an understanding of unit economics, and a focus on durable competitive advantages are the keys to outperformance.
Here, we treat stocks as fractional ownership in real businesses, not just tickers on a screen.

Here is the link to one of his post:

That’s a wrap for this recap! I spend hours every week structuring this recap so you can quickly find the insights you need, week after week.

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Happy investing,

My Weekly Stock,

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