Published July 10, 2026
Looking at the Nasdaq 100 (QQQ) index, on which our models are built, we see the 2025 rally off the “Liberation Day” tariff lows up to about the end of October. A sideways consolidation followed for several months as the AI trade was questioned. Then, the War with Iran pushed the index below its 200-day moving average (red line) in March 2026 before extraordinary earnings kicked in and the index shot upward. Now, for the past six weeks, the index has been coiling up – trading in a tighter and tighter way – before its next move.
Here, Delta Research outlines recent market activity behind this coiling up phase.
“On June 17, the U.S. and Iran signed a Memorandum of Understanding (MOU) that provided an outline for a peace agreement and a ceasefire while negotiations were ongoing. A little less than one month later, the MOU appears to have been voided.
On this news, the 10-year Treasury yield climbed back up above 4.5%, roughly where it was a month ago. The higher interest rate is in part driven by an expectation that oil prices may be higher for longer, which would be inflationary. Brent oil prices per barrel have risen from about $70 per barrel to roughly $77 following the termination of the ceasefire, also about where they were in mid-June.
This week, Samsung Electronics released its second-quarter pre-earnings guidance. The company delivered core operating profit well ahead of consensus estimates driven by better-than-expected DRAM pricing and profitability. Revenues slightly missed expectations. The stock traded down by about 9%, following the report. Separately, China-based DeepSeek announced it will begin developing its own AI semiconductor chips. The semiconductor industry has a long history of cyclicality, as supply (including from new sources) tends to increase when pricing and demand are high.
The PHLX Semiconductor Index (SOXQ) traded down by about 15% from its peak to trough, about where it was on June 9. In other words, one month of gains evaporated. To be fair, even after the selloff, the index has rebounded in the past couple of days and remains +80% year-to-date.
Overall, the S&P 500 is trading about where it was a month ago, within 1% of its all-time high level. Geopolitical uncertainty and rising rates are offset by bullish earnings expectations. For now, we are in a holding pattern until we see earnings from the bellwether companies including:
Over the past five years, the average earnings revision for S&P 500 companies during the quarter has been -2%. The 10-year average earnings revision during the quarter is -2.7%. Notably, earnings have been revised upward by 3.4% for the second quarter. Revenue and earnings growth are expected to be led by the energy and technology sectors.
The expected earnings strength of the stock market is keeping it close to all-time highs and in position to break out to new highs. Markets often spend time digesting uncertainty before choosing a direction.”
The next move after the consolidation period usually follows the direction of the preceding trend, which has been up. We will see what happens this time.
Market Update
Investors came back from the July 4th holiday in a buying mood lifting the Nasdaq 100 (QQQ) by +2% as money poured back into semiconductors and AI hardware companies. Tensions in the Strait of Hormuz put a damper on the enthusiasm Tuesday with the Nasdaq giving back -1% as oil prices and interest rates spiked on the war news. The selling continued Wednesday morning with interest rates popping again. But dip buyers swooped into the market in the afternoon to push the Nasdaq slightly positive, presumably optimistic about the coming tech earnings. The buyers found firm control Thursday with tensions in the Persian Gulf seeming to ease. Interest rates dipped and semiconductors spiked upward ahead of a new U.S. listing for Korean memory chip giant SK Hynix on Friday. The upward bias continued Friday with stocks rising +0.3% to close a positive week.
Stocks overcame war-related weakness to close the week with gains. The S&P 500 rose +1.37% while the Nasdaq 100 (QQQ) gained +1.81%. Small cap stocks posted a -0.53% loss for the week.
Warm wishes and until next week.