S&P 500 Faces Critical Test at 6,700 Level
The S&P 500 is battling to maintain the 6,700 level in today’s session, following yesterday’s record-setting performance. While semiconductor stocks face selling pressure, Alphabet provides crucial support to the index, though underlying market tensions are becoming evident.
Economic Concerns Weigh on Sentiment
Delayed economic data has reignited inflation worries, creating headwinds for the benchmark index. The Producer Price Index recorded a 0.3% increase for September, exceeding market expectations. This development has pushed the yield on 10-year US Treasury notes to 4.04%, raising concerns about continued pressure on growth-oriented sectors.
Market breadth tells a clear story: declining issues outnumber advancing ones by a ratio of three to two. Trading volume remains subdued, running approximately 10% below average levels, which is characteristic for a holiday-shortened week. Meanwhile, the VIX volatility index has climbed to 20.40, reflecting growing investor caution.
Technology Sector Takes a Breather
Technology shares are experiencing a pullback after yesterday’s strong performance. Nvidia and AMD are both trading approximately 3% lower as investors secure profits from recent gains. The consumer sector also faces pressure, with Burlington Stores plummeting 6.4% after the company issued disappointing sales forecasts for the crucial holiday season.
Should investors sell immediately? Or is it worth buying S&P 500?
Amid the broader tech weakness, Alphabet stands out with a 1.8% advance. The stock’s resilience appears driven by positive developments in artificial intelligence, including market speculation about potential discussions with Meta regarding the utilization of Google’s TPU infrastructure.
Technical Picture Shows Vulnerability
Despite Alphabet’s strength, technical indicators suggest caution may be warranted:
* The Relative Strength Index reading of 72 indicates overbought conditions
* The 6,700 level has become a critical support zone
* A break below 6,680 could potentially open the door for a move toward 6,500
The key question for traders is whether the S&P 500 can defend the 6,700 level through the close. The outcome could set the tone for Thanksgiving week trading. Further increases in bond yields beyond 4.05% would likely intensify pressure on technology stocks and create additional challenges for the index overall.
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