S&P 500 Holds Ground Following Record Peak

S&P 500 US78378X1072

Trading activity resumed after the long weekend with a lack of clear direction. The S&P 500 briefly touched a new intraday high in early trading before momentum faded. Market participants were digesting a sharp reversal in commodity markets, highlighted by a plunge of more than 8% in the price of silver. For much of the afternoon session, the index traded within a narrow band between 6,920 and 6,945 points.

Lower-than-average trading volume amplified price swings during the day. Approximately 10.2 billion shares changed hands, well below the 20-day average of nearly 16 billion. Support for the broader market emerged from an unexpected source: economic data. Better-than-anticipated figures on pending U.S. home sales for November, which rose 3.3% against a forecast of 1.0%, helped offset pressure on technology shares.

The technology sector, down roughly 3% since the start of November, continued to act as a drag. Stocks tied to artificial intelligence and semiconductors faced selling pressure.

• Shares of Nvidia (NVDA) declined 1.0%, even as news of a new licensing agreement circulated.
• AMD, Meta Platforms, and Oracle also traded lower, contributing to a 0.09% drop in the tech-heavy Nasdaq Composite.
• The dramatic sell-off in silver, which collapsed after reaching $80 per ounce, spilled over to pressure commodity and mining stocks.

Outperforming the market, financial and industrial stocks provided a counterbalance to the weakness in tech. A surge of 11.8% in Hertz (HTZ) suggested retail investor interest was turning toward heavily sold-off names.

Technical Picture Shows Strain

From a technical perspective, the S&P 500 appears to be consolidating in overbought territory while demonstrating underlying resilience.

• Key Levels: The index is consolidating just below its all-time closing high of 6,932.05, set on December 26. Immediate support at the 6,920 level was tested and held during the session.
• Trend Integrity: The primary uptrend remains intact, with the index holding well above its 20-day moving average at 6,848 and its 50-day average at 6,760.
• Momentum Shift: Indicators like the Relative Strength Index (RSI) are flashing signs of bearish divergence, hinting at fatigue in the near-term upward trend. A decisive break below 6,920 could open the door for a test of the support zone around 6,850.

Market focus now turns to the Federal Reserve. Investors are awaiting the release of the minutes from the central bank's December 9-10 policy meeting, scheduled for Tuesday. Market participants are seeking clarity on the Fed's stance after it lowered its benchmark interest rate to a range of 3.50%-3.75% at the beginning of the month.