U.S. stocks rose strongly on Monday as oil and long-term Treasury yields fell. The S&P 500 gained 1.5% to 7,600.50, the Nasdaq Composite rose 2.1% to 25,913.90 and the small-cap Russell 2000 gained 1.7%. This time, the advance was not confined to a few large technology stocks.

Yet relief in oil does not rest on a completed political agreement. Brent fell as low as $83.77 at Monday's close before returning to about $85.04 on Tuesday morning; Iran denies direct talks with the U.S. and confirms only safe-passage discussions through Oman. Oil prices have eased, but a political solution is not yet confirmed.

In Turkey, July consumer inflation came in at 1.78% month on month and 31.75% year on year, slightly below market expectations; despite that, the BIST 100 fell 0.35% to close at 13,410.54 and dollar/TL was about 47.54 on Tuesday morning. Today, U.S. job-openings data and chipmaker AMD's earnings will test the rally's employment and chip legs.

Key takeaways

  • Nasdaq 100-tracking QQQ ($QQQ) rose to $700.10, IWM ($IWM), which tracks small U.S. companies, to $296.15 and software-company ETF IGV ($IGV) to $97.35. The advance spread to small caps and software; semiconductor ETF SMH ($SMH) remained below $550 resistance at $545.62.
  • Brent's return to around $85 shows that the first oil relief is fragile. $83 is support and $85 initial resistance; without confirmed, regular tanker passage, a price decline alone does not show that the Hormuz problem is resolved.
  • July inflation came in slightly below expectations, but its effect on local markets remained limited. For local relief, the BIST 100 needs to clear 13,600 and dollar/TL needs to stay below 47.70.
  • The U.S. manufacturing index reached 55.6 in July, its strongest level since May 2022. But the subindex measuring prices paid by companies remained at 71.1; production strengthened while cost pressure persisted.

What happened?

  • According to Associated Press's August 3 closing data, the S&P 500 at 7,600.50, the Dow Jones at 53,178.41 and the Nasdaq Composite at 25,913.90 all closed at records; the Russell 2000 rose 1.7%. Bloomberg Television's August 3 The Close broadcast reported a 1% rise in the equal-weighted S&P 500; participation outside large technology stocks increased clearly.
  • Brent fell 4.7% to $83.77 on Monday. The U.S. 10-year Treasury yield fell from 4.75% to 4.70%, while the 30-year yield was 5.23%; lower oil and yields supported equity valuations in the same session.
  • The Institute for Supply Management (ISM) reported a July manufacturing index of 55.6 on August 3. New orders at 56.7, production at 58.5 and employment at 52.8 were all in expansion territory; the prices-paid subindex at 71.1 shows that cost pressure is continuing.
  • According to an August 4 Associated Press report, President Donald Trump said there had been contact with Iran and that this was the last opportunity. Iran denied that direct negotiations were under way and said safe-passage discussions through Oman were continuing in Hormuz. There is no evidence of a full reopening or an agreement.
  • TurkStat reported on August 3 that July consumer inflation rose 1.78% month on month, 31.75% year on year and 19.86% since the start of the year. Food prices rose 37.53% year on year, housing 40.32% and transport 30.83%. The B core index, which excludes energy, unprocessed food, alcoholic drinks, tobacco and gold, rose 1.66% month on month and 30.98% year on year.
  • In his August 3 video, Tunç Şatıroğlu (@tuncsatiroglu) assessed the rebound from 28,190 support in the Nasdaq 100 and the $97 threshold in the software ETF as positive technical signs. IGV closed above that threshold on Monday; SMH needs to clear $550 for chip stocks to join the advance.
  • The same video highlighted technical thresholds of $66.85 for Rocket Lab ($RKLB), about $64 for AST SpaceMobile and $13.40 for Intuitive Machines. At Monday's close, only Rocket Lab cleared its own threshold; AST SpaceMobile at $63.53 and Intuitive Machines at $13.09 remained below the levels being watched. These stocks remain highly volatile.

Market levels

Global risk and oil

  • Brent, the global oil benchmark, was about $85.04 and WTI, the U.S. oil benchmark, was $81.25. Brent has support at $83, initial resistance at $85 and a main risk area at $90-$92; WTI has support at $80, initial resistance at $83 and a risk threshold at $85. Oil-related relief cannot be considered durable until Brent settles back below $85.
  • The dollar/yen (USD/JPY) was about 157.56. The pair has support at 155, initial resistance at 158 and an intervention-risk threshold at 160. A return to 158-160 would raise expectations of another official step and increase the currency sensitivity of Japanese equities.
  • The U.S. 10-year Treasury yield was 4.70% and the 30-year yield 5.23%. The 10-year has a relief threshold at 4.65% and a risk boundary at 4.85%; the 30-year has support at 5.20% and resistance at 5.30%. Given the strong manufacturing data, the decline in yields has not yet been confirmed as durable.

US indices

  • The S&P 500 closed at 7,600.50; 7,550 is support and 7,609.78 is resistance and the next upside threshold. A close above this record would give the broadening rally a second confirmation; below 7,550 would weaken Monday's gains.
  • QQQ was at $700.10. $690 is support, $700 the main threshold and $705 the next resistance. Holding above $700 preserves the technology leg; below $690 would break the short-term advance.

Themes and ETFs

  • SMH was at $545.62, IWM at $296.15 and IGV at $97.35. SMH has support at $535 and resistance at $550, IWM support at $295 and resistance at $300, and IGV support at $95, a main threshold at $97 and resistance at $100. Until SMH clears $550, the semiconductor rally cannot be said to be confirmed.
  • Rocket Lab was at $70.47, AST SpaceMobile at $63.53 and Intuitive Machines at $13.09. Rocket Lab has support at $66.85; AST SpaceMobile support at $59-$60 and resistance at $64; Intuitive Machines support at $12 and resistance at $13.40. One-day surges do not remove the high loss risk in these stocks.

Crypto and precious metals

  • Bitcoin was about $64,027, Ethereum $1,867 and XRP $1.080. Bitcoin has support at $62,000, $64,400 as the first level that must be reclaimed and $65,800 as stronger confirmation; Ethereum has support at $1,850, an initial threshold at $1,880 and resistance at $1,970; XRP has support at $1.05, resistance at $1.09 and confirmation at $1.13. Until Bitcoin reclaims $64,400, crypto cannot be considered to have joined the equity rally.
  • The gold ETF GLD ($GLD) closed at $371.69 and the silver ETF SLV at $52.47. GLD has support at $370 and resistance at $375.50; SLV has support at $52 and resistance at $53.30. If long-term yields rise again, the odds of either metal clearing its first resistance level will fall.

Turkey

  • The BIST 100 closed at 13,410.54. Support is at 13,300 and 13,200, while resistance is at 13,600 and 13,700. Until the BIST 100 clears 13,600, the slightly-below-expectations inflation result cannot be said to have strengthened the equity market; below 13,300 would show local risk dominating.
  • Dollar/TL was about 47.54. Support is at 47.35, the main threshold at 47.50 and resistance at 47.70. If the exchange rate stays below 47.70, additional currency-driven inflation pressure should remain limited; above 47.70 would raise company costs and the risk premium again.

Red flags

  • If Brent stays above $85 and heads toward $90-$92 without an increase in confirmed tanker passage, the main support for Monday's rally disappears.
  • If the U.S. 10-year yield rises above 4.85% while SMH cannot clear $550, higher financing costs will increase pressure on semiconductor and growth-stock valuations.
  • If QQQ falls below $690, IWM below $295 and IGV below $95 together, the thesis that the advance has spread across the market breaks down.
  • If the BIST 100 falls below 13,300 while dollar/TL rises above 47.70, the limited positive surprise in July inflation will not have reached local assets.
  • If USD/JPY rises above 160, the risk of a new intervention in Japan increases; if it falls sharply below 155, a stronger yen will put more pressure on exporters' foreign earnings. Either direction could increase volatility across Asia.

Calendar

  • August 4, 5:00 p.m. TRT: U.S. June job openings will be released. Cooling labor demand could ease the 10-year yield; a strong result would bring the 4.85% risk boundary back into focus.
  • After the U.S. close on August 4: Chipmaker AMD will report second-quarter results; the conference call starts at midnight TRT on August 5. Data-center demand, profitability and the company's forward outlook will be decisive for SMH's $550 threshold.
  • August 5, 5:00 p.m. TRT: The U.S. July services-sector index will be released. Employment and prices-paid components will show whether the strong manufacturing growth and high cost pressure are spreading into services.
  • August 6, 3:30 p.m. TRT: Preliminary U.S. second-quarter productivity and unit labor cost data will arrive. The effect of wage pressure on company profits and long-term yields will be watched.
  • August 7, 3:30 p.m. TRT: The U.S. July employment report will be released. The 10-year yield's response, alongside employment, unemployment and wage growth, will determine how durable the rally is.

My analysis

Monday's advance went beyond a short-lived response to falling oil. IWM and IGV clearing resistance, the equal-weighted index rising and the S&P 500 nearing a record show that buying was not confined to a few large companies.

However, two important gaps remain. There is no confirmed agreement signed in Hormuz or return to normal vessel traffic, and SMH has not cleared $550 resistance. With the ISM prices-paid subindex at 71.1, the decline in long-term yields could remain a one-session move.

For the rally to continue more reliably, the S&P 500 needs to close above 7,609.78, SMH must clear $550, Brent must stay below $85 and regular tanker passage must be independently confirmed. If any one of these four conditions is missing, the advance may continue but the fragility remains.

Sources

This is not investment advice. It is a research and monitoring note.