To The Moon

$S&P 500(.SPX)$ $NASDAQ(.IXIC)$ The U.S. stock market in July 2025 is riding a wave of optimism, with the S&P 500 and Nasdaq Composite hitting record highs, as reported by Charles Schwab and Trading Economics. This follows a turbulent first half marked by a significant crash in April, largely attributed to new tariff policies under the Trump administration, according to U.S. Bank. Despite this, investors have shifted focus to strong corporate earnings and stable economic data, creating a fertile ground for trading opportunities. Below, we explore the key market movements, stocks to watch, and potential trading strategies for July 31, 2025.

Market Context and Key Movements

Recovery from April Crash

The 2025 stock market crash in April saw global indices plummet, with Korea’s KOSPI dropping over 5%, Japan’s Nikkei 225 falling 7%, and Pakistan’s KSE 100 declining by 7.31%, as detailed on Wikipedia. The U.S. market, particularly the S&P 500, entered bear market territory due to tariff-related fears. However, by July, the S&P 500 has climbed 3.60% over the past month and 17.89% year-over-year, reaching 6421 points on July 31, per Trading Economics. This resilience is driven by:

• Corporate Earnings: Strong Q2 earnings have bolstered investor confidence, with companies like PepsiCo and United Airlines exceeding expectations earlier in July, as reported by CNBC.

• Economic Stability: Positive data, such as better-than-expected GDP and ADP jobs figures, has supported market gains, according to Schwab.

• Trade Dynamics: While a 35% tariff on Canada announced on July 10 caused a market dip, investors are increasingly looking past tariff impacts, focusing on fundamentals, per U.S. Bank.

Events to Watch on July 31

Yahoo Finance’s financial calendar highlights 98 economic events, 5 IPO pricings, 617 earnings reports, and 28 stock splits scheduled for July 31, 2025. While specific events for this date are not detailed, traders should anticipate:

• Earnings Reports: Major tech firms like Microsoft (MSFT) and Meta (META) are expected to release earnings, potentially influencing the Nasdaq, as noted by Schwab.

• Economic Data: Releases such as employment, manufacturing, or consumer confidence data could spark intraday volatility, given the high number of economic events.

• Trade Updates: Ongoing trade tensions, particularly with Canada, could resurface if new developments emerge, impacting sectors like industrials and consumer discretionary, as seen in CNBC’s July 11 report.

Stocks to Watch

Technology Giants

• Microsoft ( $Microsoft(MSFT)$ ): As a leader in cloud computing and AI, Microsoft’s earnings report on July 31 could set the tone for the tech sector. Strong Azure growth or AI advancements may drive bullish momentum, while any shortfall could pressure tech indices. Monitor pre-earnings sentiment on platforms like Yahoo Finance (https://finance.yahoo.com/quote/MSFT).

• Meta ( $Meta Platforms, Inc.(META)$ ): Meta’s focus on social media, advertising, and metaverse investments makes its earnings a key indicator of consumer and digital trends. Positive results could reinforce tech optimism, while weak ad revenue might trigger a sell-off. Check Meta’s stock page for updates (https://finance.yahoo.com/quote/META).

Small- and Mid-Cap Stocks

• iShares Russell 2000 ETF ( $iShares Russell 2000 ETF(IWM)$ ): Piper Sandler’s July 8 note on CNBC highlights a “catch-up trade” in small- and mid-cap (SMID) stocks, which have outperformed recently due to broadening market breadth. The IWM ETF offers exposure to this trend, making it a candidate for swing trading (https://finance.yahoo.com/quote/IWM).

• Individual Small-Caps: Stocks like Wingstop (WING) or FTAI Aviation (FTAI), mentioned in Yahoo Finance’s holiday schedule article, may benefit from small-cap momentum. Research individual names for strong fundamentals.

Crypto-Related Stocks

• Coinbase (COIN): The “Crypto Week” in Congress (July 14-18), with three cryptocurrency bills discussed, as per the Tiger Weekly schedule, could lead to ongoing regulatory developments. Positive clarity may boost Coinbase, a leading crypto exchange (https://finance.yahoo.com/quote/COIN).

• MicroStrategy ( $Strategy(MSTR)$ ): Known for its Bitcoin holdings, MicroStrategy could see volatility if crypto legislation progresses, making it a speculative watch (https://finance.yahoo.com/quote/MSTR).

Table: Stocks to Watch on July 31, 2025

Trading Opportunities

Earnings-Driven Trades

• Options Strategies: Earnings reports from Microsoft and Meta could create significant volatility. Consider:

  Straddles: Buy both a call and put option at the same strike price to profit from large price swings, regardless of direction.

  Bullish Calls: If pre-earnings sentiment is positive (e.g., strong analyst upgrades), buy call options with a short expiration to capture upside.

• Execution: Monitor pre-market and after-hours trading for entry points. Use limit orders to avoid slippage during volatile periods. Platforms like Schwab (https://www.schwab.com) offer real-time earnings data.

Small-Cap Momentum

• Swing Trading: The outperformance of SMID-caps, as noted by Piper Sandler, suggests a 1-3 month holding period for ETFs like IWM or individual small-caps. Use technical indicators like the Relative Strength Index (RSI) to time entries, avoiding overbought levels (RSI > 70).

• Risk Management: Set stop-losses at 5-10% below entry to protect against sudden reversals, especially if trade tensions escalate.

Economic Data Reactions

• Day Trading: The 98 economic events on July 31 could trigger intraday spikes in index ETFs like SPDR S&P 500 (SPY) or Invesco QQQ (QQQ). Scalp small price movements using 1-minute or 5-minute charts, targeting 0.1-0.3% gains per trade.

• Preparation: Check Trading Economics (https://tradingeconomics.com/calendar) for scheduled releases and set alerts for high-impact data like nonfarm payrolls or PMI.

Hedging Against Risks

• Protective Puts: With trade war concerns lingering (e.g., Canada tariffs), buy put options on vulnerable sector ETFs like Industrials Select Sector SPDR (XLI) to hedge long positions.

• Cash Allocation: Hold 20-30% cash to capitalize on potential dips if negative news emerges, allowing for bargain hunting in quality stocks.

Trading Plan Suggestions

Short-Term Plan (Day Trading)

• Focus: Earnings-driven volatility in MSFT and META, plus economic data reactions in SPY/QQQ.

• Strategy: Use options straddles for earnings or scalp ETF movements post-data releases. Set tight stop-losses (1-2%) to limit risk.

• Tools: Monitor CNBC (https://www.cnbc.com) for earnings updates and TradingView (https://www.tradingview.com) for real-time charts.

Medium-Term Plan (Swing Trading)

• Focus: Small-cap momentum via IWM or select small-caps like WING.

• Strategy: Buy on pullbacks to key support levels (e.g., 50-day moving average). Hold for 1-3 months, exiting if trade news turns negative.

• Tools: Use Yahoo Finance (https://finance.yahoo.com) for fundamental analysis and Schwab (https://www.schwab.com) for technical indicators.

Risk Management

• Position Sizing: Limit each trade to 2-5% of portfolio to manage volatility risks.

• Diversification: Spread exposure across tech, small-caps, and crypto stocks to avoid sector-specific shocks.

• Stop-Losses: Set stops at 5-10% below entry for swing trades and 1-2% for day trades.

• News Monitoring: Stay updated via CNBC, Yahoo Finance, and Trading Economics to react to breaking news on tariffs or Fed policy.

Conclusion

July 31, 2025, presents a dynamic trading environment with opportunities driven by earnings, economic data, and small-cap momentum. Microsoft and Meta earnings could steer tech sentiment, while small-caps like IWM offer growth potential. Crypto stocks may see action if regulatory news emerges. However, trade tensions and potential Fed rate cut signals introduce uncertainty, necessitating cautious risk management. By focusing on earnings plays, small-cap trends, and data-driven trades, investors can navigate this market with confidence, leveraging resources like Yahoo Finance, CNBC, and Trading Economics for real-time insights.

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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