Stocks Finished Higher Yesterday, Nasdaq Makes New All-Time High And Close Stocks closed higher yesterday across the board. The small-cap Russell 2000 led the gains with 1.07%, followed closely by the Nasdaq with 0.95%, and the S&P 500 with 0.61%. New highs by NVIDIA definitely helped the tech-heavy S&P and Nasdaq. Biotech also helped out, including the small-cap index too. Small-caps have also seen a nice lift ever since the budget bill looked like it was going to pass (and then finally did). The additional tax provisions will definitely help smaller companies. Additionally, with it looking like the Fed is still expecting to cut rates this year (there's only 4 more meetings left in the year), these smaller companies will also benefit from lower interest rates. And since the market is forward looking, investors aren't waiting for the rate cut(s) to happen, they appear to be pricing it in ahead of time. The Fed has sat on rates all year for fear of rising inflation due to tariffs. But so far, inflation over the last several months has gone down, defying those concerns. And that prompted Fed Chair Jerome Powell, just the other week, to hint at the possibility that the Fed could begin cutting rates as early as this month when they meet on July 29-30. Same goes for Federal Reserve Governor Christopher Waller. And according to yesterday's FOMC Minutes, at least one other person shared that sooner timeline. The likelihood still favors a September cut at the earliest, with the more likely dates being October and December. But if inflation keeps easing, that could give the Fed the opportunity to take action sooner rather than later. In other news, yesterday's MBA Mortgage Applications rose 9.4% w/w with purchases up 9.4% and refi's up 9.2%. Today we'll get Weekly Jobless Claims, and we'll hear from Fed policymakers Alberto Musalem, Christopher Waller, and Mary Daly as they speak at their engagements throughout the day. The market is still waiting on the announcement of new trade deals. The E.U. and India are expected to be announced soon. But so was South Korea and Japan at one point, and they are now 2 of at least 20 countries that received letters stating what their new tariff rate will be starting August 1 if no deal is forthcoming. Those two countries are expected to see their tariffs rise to 25%. That is better, however, than other countries who are expected to see much higher rates. Brazil, for example, is expected to see their tariffs ratcheted up to 50%. Earnings season doesn't officially begin until next week on 7/16 when Alcoa reports after the close. But it's already unofficially begun. And we've got 20 companies on deck to report today including Delta Airlines, ConAgra, and PriceSmart to name a few. Next week, there's as many as 189 companies in queue to report, including big bank stocks like JPMorgan Chase, Wells Fargo, BlackRock, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs to name a handful. And the number of companies reporting grows each week as earnings season goes on. Earnings season is always an exciting time since stocks typically go up during earnings season. And I'm expecting this earnings season to do the same. Stocks are poised for an upside breakout. And earnings season could provide the perfect catalyst for that to happen. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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