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A case can be made that the stock market is due for a pullback that spans at least a few percentage points, and likely more. The stock market, however, isn't bending easily to that narrative whim, which is partly why it keeps holding up as well as it holds up no matter the headline.
When the market continues to advance, despite all the calls for it to consolidate and/or correct, there is a fear of missing out on further gains that provides underlying support. That fear doesn't always drive the market higher, but it does keep it from suffering a material setback.
Currently, the S&P 500 futures are up three points and are trading 0.1% above fair value, the Nasdaq 100 futures are down eight points and are trading in line with fair value, and the Dow Jones Industrial Average futures are down 21 points and are trading in line with fair value.
These ho-hum indications follow moves off the April lows for the major indices that range from 21% to 42%. For good measure, a report from BTIG notes the Nasdaq 100 has gone 60 straight days without a close below its 20-day moving average, something it hasn't done since 1999.
There is an air of resilience in the market once again. That is remarkable considering Coca-Cola (KO), General Motors (GM), Lockheed-Martin (LMT), Danaher (DHR), Sherwin-Williams (SHW), Philip Morris (PM), and RTX Corp. (RTX) are all lower following their earnings reports.
It becomes less remarkable, though, knowing that Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Meta Platforms (META), Amazon.com (AMZN), and Tesla (TSLA) are all higher in pre-market trading. The mega-cap stocks are carrying the tape on their back.
The shape of things at the moment, then, makes it appear as if the market cap-weighted indices will reflect a better-looking market than is actually the case. The question is, will the mega-cap stocks hold their form (and the major indices), or will they roll over and make life more difficult for the broader market?
This day will be a "price action" day, like many of the days ahead, as participants assess the degree to which earnings news and guidance validates the eye-opening run many stocks have had. Tesla and Alphabet will report their results after Wednesday's close.
Today's reports are more about the "other stocks," and they haven't moved the market needle in any meaningful way. The economic calendar won't be moving the needle either. It is devoid of any notable U.S. reports today.
Nonetheless, Treasuries are sticking to a course of lower yields. The 2-yr note yield is down one basis point to 3.84%, and the 10-yr note yield is down one basis point to 4.36%, digesting Treasury Secretary Bessent's view that he expects to announce a rash of trade deals in the coming days and that August 1 is a hard deadline for all countries before tariff levels boomerang back to April levels. He clarified, though, that that doesn't mean talks are over.
