Indices market

US small caps have lost nearly 9% since August, with surging Treasury yields overwhelming a historically favourable midterm trading period. Now the Russell 2000 is threatening to break a major support zone ahead of US CPI.

Global indices managed to bounce back towards the end of the week as risk mood improved following Thursday’s drop in bond yields and a slight decline in oil prices. But by late Friday afternoon, oil prices had made back most of Thursday’s drop and the bond markets remained under some pressure as European bourses closed for trading.

Markets went from risk off to risk on yesterday afternoon and we have since kicked on with some follow-up buying of stocks, gold and silver, while the dollar has also shown signs of weakness. Risk appetite turned positive after bond yields and oil prices both retreated yesterday.

Hang Seng Tech continues to slide despite improving earnings expectations across many major constituents. With valuations contracting and key technical support broken, the question is whether the selling has further to run.

The global equity markets remain under pressure and with oil surging higher again this week, we have even more reason to remain cautious. Already, the S&P and Nasdaq were running support from only a handful of hyperscalers and AI stocks. But even these indices have started to take notice of the deteriorating market breadth and global indices. Still, for me, the ongoing weakness is becoming more evident in the Dow and the small-cap Russell 2000 indices, and as such I will continuing watching these markets closely to provide a more accurate signal about the health of the stock markets.

Recent trading sessions have begun to highlight a clear lack of direction around Dow Jones price action. This can be seen in the performance of the last three sessions, where the index has posted a modest decline of approximately 0.2%, reflecting the absence of a consistent directional bias and a growing sense of caution across the market.

Fresh record highs, supportive seasonality and earnings season just ahead leave the S&P 500 bulls with plenty in their favour, even as narrowing breadth argues against getting too carried away.

The new trading week is underway and the Nasdaq 100 is once again displaying a meaningful bullish bias in the short term. This can be seen in the index's recent performance, which has gained more than 2.1% over the last three trading sessions, returning once again to record-high territory.

The Dow Jones support breakdown shows rising bond yields and rate hike bets hitting U.S. stocks while tech giants prop up the Nasdaq.

When looking at the major tech-heavy US indices like the S&P 500 or the Nasdaq 100, you wouldn’t think that the stock market is particularly weak. Yet, beneath the surface, the market is far from healthy right now. Investors are evidently just piling into the big tech and AI names, and as a result, market breadth is deteriorating. Other indices like the small cap Russell 2000 and the Dow Jones are starting to reflect that weakness.

Nikkei has started October with a powerful breakout, helped by renewed yen weakness and strong upside momentum

Recent trading sessions have done little to restore confidence in the equity market. Over the last four sessions, the S&P 500 has declined by nearly 1.00%, a move that highlights growing short-term weakness and keeps the index moving further away from its record-high territory.