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

Federal Reserve Policy Takes Center Stage

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.

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