S&P 500’s Record Run Shows Signs of Fatigue

The S&P 500 continued its pursuit of record levels on Friday, though the advance was marked by investor caution. After touching a new intraday peak, the benchmark index lost momentum, closing with only marginal gains amid below-average trading activity. The 6,700 level emerged as a significant psychological barrier for market participants.

Federal Reserve Policy Takes Center Stage

Market expectations are overwhelmingly positioned for a 25-basis-point interest rate cut on October 29, with probabilities standing at 98%. However, the ongoing US government shutdown continues to delay critical economic data releases, complicating the Federal Reserve’s decision-making process. Despite these political headwinds, the S&P 500’s resilience appears anchored by solid corporate fundamentals and prevailing risk-on sentiment.

Sector Performance Presents Mixed Picture

Market movements revealed a sharply divided landscape across different sectors. Financial stocks and cyclical consumer goods companies delivered robust advances, while the energy sector trailed significantly with a 1% decline.

Healthcare equities experienced a substantial rally, led by Humana’s nearly 11% surge following confirmation of the company’s guidance. This positive momentum extended to Centene and Cigna, which climbed 5.1% and 4.7% respectively.

Should investors sell immediately? Or is it worth buying S&P 500?

Not all stocks participated in the record-setting activity:
– Palantir plummeted 7.5% following reports of security concerns
– Casino operators Las Vegas Sands and Wynn Resorts each declined 6%
– Tesla retreated over 5% after releasing quarterly results

Technical Indicators Flash Warning Signals

From a technical perspective, the S&P 500 maintains its position comfortably above both the 50-day and 200-day moving averages. The golden cross formation that emerged in July—when the 50-day average crossed above the 200-day average—continues to signal a healthy upward trend. However, momentum indicators including Williams %R and the Commodity Channel Index are showing signs of exhaustion.

The Relative Strength Index reading of 68 suggests potentially overbought conditions, raising questions about whether a near-term correction might be approaching. The index continues to trade within an upward channel established in May 2025, with resistance anticipated at 6,725 and 6,750 points. Support appears at the daily pivot point of 6,695.

Looking ahead to Monday’s session, futures indicate a modest 0.2% advance. While the broader upward trajectory remains intact, current overextended conditions could prompt a period of consolidation.