The S&P 500’s internal market strength has deteriorated sharply, with just 42% of index constituents trading above their 50-day moving averages, the lowest share in five months. The decline in breadth over the past two weeks signals that fewer stocks are participating even as the headline index continues to consolidate near record levels.
Bank of America notes that U.S. equities have historically faced seasonal weakness beginning in August, with selling pressure often peaking around mid-September before giving way to a stronger fourth quarter. So far, however, the S&P 500 has avoided a meaningful correction.
Investors are also watching the approaching U.S. election cycle. Donald Trump has again predicted further stock-market gains, while some market participants expect fiscal and political incentives ahead of the elections to provide additional support for U.S. equities and crypto. That remains a market thesis rather than a guaranteed seasonal catalyst.
