S&P 500 Notches New Highs but Underlying Weakness in Growth Stocks Raises Concern

Stocks surged to record highs after Alphabet’s earnings underscored strong demand for AI. With both Alphabet (NASDAQ:) and Tesla (NASDAQ:) reporting this week, the 1-month implied correlation index ticked higher. I expect that trend to continue as we wrap up the bulk of earnings next week.

I’ve noticed that Wingstop (NASDAQ:) has struggled lately, seemingly losing support at $315, likely influenced by Chipotle’s (NYSE:) weak results.

Still, the stock has been under pressure for a while now, and I can’t help but wonder if this signals something more profound about the broader market’s appetite for risk.

It is essentially the same thing when it comes to CoreWeave (NASDAQ:), which fell below $125 yesterday, which was support. With support broken, if the stock doesn’t snap back quickly, it probably has further to fall.

Tesla closed just above its uptrend line after testing it earlier. The stock bounced because of the $300 put wall, but I’m not sure that will hold today. A break below this trend line likely means a pullback into the low $270s.

The continues to knock on the door of resistance around $225, but can’t manage to break through. A break above this resistance would be bullish for the IWM, potentially leading to a climb back toward the November 2024 highs. However, volume is declining, momentum is fading, and it looks like it’s beginning to form a wedge pattern.

So, while a breakout and push higher would be encouraging, I’m skeptical it has the strength to pull it off. Instead, it appears to be losing steam, making a potential pullback to $212 look more likely.

JGBs are approaching what could be a significant breakout. I’m not sure how this will resolve, but ultimately, this appears to be a bullish pattern for the , and a breakout could send rates significantly higher.

On Wednesday night, we surpassed the highs seen in February, making this a key development to watch.

The is also getting close to those February highs.

What matters here is the spread with US rates, because any narrowing could lead to decline, potentially breaking below the critical 140 level, which has been a significant support area.