The S&P 500 remains within half a percent of its level three weeks ago, keeping its uptrend intact despite thin volumes and narrow trading ranges. Several key market indicators, including the VIX dropping below 15 and the 10-year Treasury yield climbing back above 4.7 percent, are approaching significant thresholds that could signal a shift in market character. Federal Reserve Chairman Kevin Warsh suggested at the Jackson Hole symposium that short-term rate hikes could be necessary soon, with market-implied odds for a September increase standing just above 50 percent. Nvidia and Micron together account for one-third of aggregate 2026 earnings growth, while the top-ten earners represent two-thirds of total earnings, raising questions about the market’s ability to absorb an inevitable deceleration in profit growth. Corporate debt spreads remain remarkably tight and broad commodity indexes are approaching five-year highs, adding to overall market tension heading into the final quarter of the year.
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