Market Overview & Overnight Action
- Equities & AI Strength: Major large-cap indices like the SPY and Nasdaq (QQQ) are holding onto a good portion of yesterday's sharp short-squeeze rebound. The AI trade is back in focus following encouraging comments from Nvidia CEO Jensen Huang (projecting strong chip demand) and ongoing investor interest in OpenAI's valuation.
- Small-Cap Divergence: While large-caps are holding firm, small caps are showing relative weakness. The Russell 2000 is down about 40 basis points in pre-market trading, continuing to struggle below the key $2,900 pivotal point due to heightened sensitivity to elevated interest rates.
- Macro & Yields:
- Crude oil is softening further (down roughly 80 bps adjusted for roll-over, trading near the $96–$98 balance zone), which has helped ease immediate inflation pressures and lower long-term yields.
- The 30-year yield is hovering around 5.30% (off its highs), while the 10-year yield is just below 5.0%.
- Meanwhile, the 2-year Treasury note yield is flashing expectations, with CME FedWatch pricing sitting at a 55% probability of an October interest rate hike.
🎯 Key Price Levels & Watchlist
- S&P 500 (SPY):
- Current Range: Trading right near the lower boundary of the new balance area (between $760.20 and $764.00).
- Downside Support: The critical Fed-day breakdown area around $756.00, with the major August low pivotal support resting at $748.75.
- Nasdaq (QQQ):
- Maintaining its position above the key $702.50 intermediate support zone after staging a nearly 3% recovery from its recent lows.
- Russell 2000 (Small Caps):
- Trading below the important $2,900 threshold, keeping downside risk open for a potential 5% to 6% pullback if small-cap weakness persists.
- Commodities & Metals:
- Gold: Holding firm above the key $4,360 monthly profile pivotal point, looking for a strong weekly close.
- Silver: Continuing to show relative strength, trading cleanly above its August low pivotal point (~$63.71) at $66.78.
- Bitcoin (BTC):
- Rebounding about 2% in overnight trade to hover near $76,000 (reclaiming the low end of its prior balance area). The primary bullish breakout target remains $83,000.
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