How Much Higher Can SPY Go in July 2025?
- giuliapedrinivisio
- 6 days ago
- 3 min read
Author: Rachel Hade
Breaking down earnings, momentum, Fed Policy and Seasonal Trends
It’s clear that SPY is climbing into fresh highs, which leaves many traders wondering: is this rally sustainable? Or is this the start of a mid-summer bull trap?
Looking at current macroeconomic data, technical and July seasonality, in my opinion, SPY still has room to run in July.
Be cautious as, the ceiling is narrowing, and the risk is rising. Let’s break it down!
Is the SPY Rally Outstretched – or Just Getting Started?
Currently, the rally seems powerful but not yet euphoric. SPY has surged following a technical breakout above key resistance levels, supported by a combination of elements.
· A Fed that is cautious but not hawkish
· Upbeat earning expectations – emphasis on tech
· Strong seasonal tailwinds
In stating this we need to be aware as, we are trading near upper trendline territory , meaning- unless earnings deliver across sectors this rally could stall by the late days of July.
Inflation & Fed Rate Outlook: A Tug-of-War!
The Fed is expected to hold rates steady in July, despite continued disinflation. This aligns with Jerome Powell’s (Chair of the U.S Federal Reserve- America’s central bank) cautious tone in recent remarks.
However, several key data points this week/month of July could shift market expectations for the first cut (now priced for September or later) – including Non-Farm Payrolls and ISM readings. However Powell didn’t rule out a July cut, stating that the Fed can’t say as it’s too soon – keeping markets on alert.
In my opinion a surprise in jobs or inflation could cause a short-term pullback in SPY, but any dip would likely be bought unless the Fed turns hawkish again.
Seasonal Patterns: July Tends to Favor Bull
I think that seasonality is on the bull side – for now, and this is why! Historically, July has been a strong month for the S&P 500.
Average July gain (~1%-3%)
EquityClock it’s averaged a +1.1% return in July over the past 50 years.
Forex.com reports that, over +30 years- July has delivered an average +1.4% return.
EquityClock also notes that July has been positive in average 54%-66% over the past 50 years
It’s known that the ‘summer rally’ often starts in late June and lasts till mid August!
Events and their Market Impact!
In the recent rising U.S – Iran tensions resulted in injecting a wave of uncertainty into global markets. While oil prices initially spiked- assets like gold rallied and equities wobbled.
SPY (which I have been analysing) has proved remarkably resilient. Briefly dipping and quickly rebounded because investors focused on strong U.S. earnings and steady Fed. The conflict hasn’t derailed the broader uptrend- yet!
There’s no formal peace accord between the U.S. and Iran. While the ceasefire has reduced immediate military risks, tensions still remain high. Resulting in keeping markets on edge—raising the potential for defence, volatile reactions in oil, and broader equities if either side escalates again.
Technical View – using ‘tradingview.com’
Here’s where things get interesting!
July 2024 – we see a clear bullish channel formed but after some time the price falls and was corrected
July 2025- We see a similar pattern starting to form, I have showed a ghost feed to show what I predict will occur (yellow rectangle). I also showed the breakout at the resistance (white circle)
Comparison: both years at the start of July– this Green bullish candlestick appears - signalling resistance breakout & strong buyer dominance and in my opinion it indicates the continuation of bullish momentum; in my opinion.
Conclusion: SPY’s July Path Looks Promising- But Not Risk Free!
SPY may still have fuel to push higher in July 2025, backed by strong bullish momentum, strong seasonality and tech-driven earnings optimism.
In my opinion, the rally remains intact as long as the Fed stays steady and earnings deliver. Traders should watch key levels closely and be reactive to sentiment shifts.
You can read also about:
Comments