S&P 500 Analysis

On Monday, Fairlead Strategies released an analysis indicating that the S&P 500 (SPX) is currently experiencing a consolidation phase.

This pattern arises from a recent decrease in short-term upward momentum. Despite the overall market slowdown, strength in mega-cap stocks—excluding NVIDIA (NASDAQ:NVDA)—has helped maintain market support.

The analysis suggests that major indices will remain attractive to investors until the year's end; however, a market correction is anticipated early next year.

In the bond market, the 10-year Treasury yields are currently testing a critical resistance zone between 4.36% and 4.37%. This resistance combines a downtrend line and the weekly cloud, a technical analysis indicator.

The upcoming Federal Reserve announcement later this week is expected to be pivotal for yields. If the 10-year Treasury yields close the week above the resistance level, it would signal a breakout, reversing the cyclical downward trend within a longer-term uptrend.

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