Stocks closed lower on Friday, but the small-cap Russell 2000 and the Dow ended higher for the week. That was the second week in a row for both of them.

The Russell and the Dow have both been beneficiaries of the recent market rotation and breadth expansion. While investors pare back allocation in large-cap tech/AI names, small-caps and other previously overlooked mid-cap and large-cap stocks are seeing new investor interest. And that's bullish for the market.

Even though there's a rotation (lessening) of big-tech/AI positions, that trade is not dead. And after a pullback and pause, there will be exciting new entry points for the best of them. This rotation is not an abandonment, simply a reallocation in an over-crowded, over-invested trade, until the next leg-up.

The world woke up on Friday to news of widespread computer outages on Windows systems, courtesy of a CrowdStrike issue, ironically used to prevent computer outages from cyberattacks. Planes were grounded, banks and telecoms were affected, other businesses were impacted, some emergency services were curtailed, and more. Fortunately, CrowdStrike fixed the problem in short order and normal operations resumed. But it was a scary reminder of just how dependent we are on technology. CrowdStrike's stock was down by more than -11% on the day.

There was not much in the way of economic reports out on Friday. And the only thing on the docket for today is the National Activity Index.

The calendar fills up as the week goes on. But the big report everybody is waiting for is Friday's Personal Consumption Expenditures (PCE) inflation report. That's the Fed's preferred inflation gauge. And all eyes will be on that to see if the progress on inflation continues, giving the Fed the added confidence it says it's looking for to begin cutting interest rates.

Earnings season continues this week with 836 companies on deck to report with marquee names like Verizon on Monday, Alphabet, Tesla and Visa on Tuesday, Thermo Fisher, IBM and ServiceNow on Wednesday, AbbVie and Union Pacific on Thursday, and Bristol Myers on Friday.

Next week is even more jam-packed with 1,159 companies ready to report, and an array of even bigger names in queue like McDonald's, ON Semiconductor, Microsoft, Advanced Micro Devices, Qualcomm, Apple, Amazon, Intel, Berkshire Hathaway, and many more.

And of course, we have the FOMC Announcement on July 31. The Fed is not expected cut at this one. But traders will be listening intently for any signals as to their readiness to do so in September, or not until November or even December.

But until then we've got a busy enough week ahead.

And we'll see if the market can regroup, and what this week's market rotation and breadth expansion will look like.

See you tomorrow,