Stocks Defy Gravity: S&P 500 Holds Above 7,650
The S&P 500 refuses to correct.
The index closed Friday at 7,686 — a fresh record close, up 2.6% from late July and comfortably above every prior peak this year. The June correction to 7,238 has been fully retraced, the leadership has broadened beyond the megacaps, and the market has now gone a full month without a 1% down day.
What’s fueling the melt-up
Earnings delivered. The second-quarter reporting season produced the beat rate bulls needed — solid growth, resilient margins, and guidance that, on balance, came in above expectations. The dollar’s sharp rise, feared as an earnings killer, turned out to be manageable because companies had hedged more aggressively than usual. And the macro data kept printing “firm but not hot” — the Fed’s favorite recipe.
Positioning adds fuel. Institutional equity exposure, while elevated, isn’t stretched the way FX positioning is — the market’s excesses live in the currency market this year, not the stock market. That asymmetry has allowed equities to absorb macro shocks (see: the yen) that would have produced corrections in past cycles.
What would end it
The honest answer is one of two things: a Fed that surprises hawkishly, or credit. Neither is imminent — but August liquidity cuts both ways, and September brings the Fed, the jobs report, and the return of full volume. The market’s calm is earned, but it’s also seasonal.
Above 7,505 (August’s breakout pivot), momentum targets 7,817. Below it, the old range at 7,240 re-engages. Enjoy the quiet while it lasts.
Disclaimer: This is market commentary, not investment advice. Trading FX, commodities, equities and crypto carries substantial risk of loss.
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