S&P 500 (SPY) Remains Under Pressure At The Start Of The Week
- The stock market is falling as traders sell riskier assets amid recession worries.
- Strong dollar and rising Treasury yields serve as additional bearish catalysts for stocks.
- The pullback is broad, and all market segments are under pressure.
S&P 500 Retreats As U.S. Dollar Tests New Highs
S&P 500 continues its attempts to settle below the support level at 3660 as traders move out of riskier assets.
Treasury yields are testing new highs. Currently, the yield of 10-year Treasuries is trying to settle above the 3.85% level. At the start of August, 10-year Treasuries yielded just 2.60%, so the recent upside move was huge.
It should be noted that strong dollar also serves as a negative catalyst for U.S. stocks by making them more expensive for foreign investors. Today, the U.S. Dollar Index tested highs that were last seen back in 2002. Dollar’s strength highlights the global flight to safety, which is bearish for riskier assets like stocks.
S&P 500 Tries To Settle Below The Support Level At 3660
From a technical point of view, RSI has recently entered into the oversold territory, so the risks of a rebound are increasing. This year, RSI has been at current levels in late January, after the strong pullback.
This time, the panic looks strong, so RSI may move to lower levels without a rebound. It remains to be seen whether the market is ready for a flash sell-off, which happened during the coronavirus crisis. However, the current pullback is broad, and the recent moves in currency markets show that investors are very nervous.
For a look at all of today’s economic events, check out our economic calendar.