The Nasdaq declined during most of July, but then bounced sharply over the past five days to end the past month up 2.2%.

The bounce has been driven by hopes of an end to the war with Iran and strong quarterly earnings from top technology companies. The bounce occurred between the 100 and 200-day EMAs, roughly in the middle of the trend channel. The RSI at 61 has room to continue higher.

I was not expecting this bounce and still think there are decent odds of another major escalation with Iran. But for the time being, any cessation in the war is welcomed, and perhaps the US running out of long-range precision missiles and interceptors is helping drive the relative peace. Not to mention the spike in energy prices and unpopularity of the war ahead of mid-term elections. Hopefully diplomacy prevails.

Strong earnings and AI optimism were also bullish drivers of the rally in recent days. Results from companies like Palantir (big revenue raise, shares soared ~30%), Caterpillar (raised guidance on AI data-center demand), and follow-through from prior Big Tech reports (Amazon, Alphabet, Meta, etc.) reassured investors about AI demand and returns on capital spending. Tech and communications sectors led.

Positive manufacturing data and a rebound in “Magnificent 7”/AI-related names also helped drive the bounce after July volatility. The Dow hit record closes; the S&P 500 approached or set fresh highs.

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Takeaway: Market factors have turned more bullish over the past week, perhaps signaling an opportunity to buy the start of what could be a much larger rally to new highs. Even with the bounce, many tech stocks are still down 20% or more from 2026 highs,