Rising Yields and Oil Put the S&P 500 Uptrend Under Pressure

S&P 500 Index (SPX) futures are under significant pressure this morning, down about two-thirds of 1% as rising Treasury yields and another spike in oil hit stocks at the same time. The bigger question is whether equities can keep holding their broader uptrend if interest rates continue climbing and crude oil starts confirming a larger breakout.

The S&P 500 is still only about 3% below its all-time highs, so this is not yet a major breakdown. But we are breaking recent technical support, which puts the 7,570 pivot in focus. As long as the S&P 500 stays above 7,570, I remain short term bullish because the broader trend is still higher. If 7,570 breaks, I move to a neutral stance and start watching for a test of the midpoint of the larger megaphone pattern.

The U.S. 10 Year Treasury Yield (US10Y) is probably the most important chart right now. It is pressing against 4.8%, which lines up with the January 2025 high. For now, I respect 4.8% as resistance. If yields pull back from here over the next few days, that could give stocks some relief and potentially support another move toward all-time highs over the coming weeks to months.

The risk is what happens afterward. If yields pull back, consolidate, form a bull flag, and then break 4.8%, the next major level is 5%. That takes us back to the October 2023 high and creates the possibility of a major double top. A move through 5% would likely make markets substantially more volatile.

We are seeing the same pressure globally. The Japan 10 Year Government Bond Yield (JP10Y) reached 3.01% before pulling back slightly, the first time yields have been around 3% in more than 30 years. Japan's debt to GDP is approximately 240%, while the United States is around 130%. The source also places U.S. government debt interest expense at approximately $1 trillion. That is why rising yields matter so much: higher government borrowing costs eventually affect financing conditions across the economy.

The U.S. Dollar Index (DXY) is also moving higher again after yesterday's pullback, although it still has room before reaching its major technical resistance area.

Now look at West Texas Intermediate Crude Oil Futures (CL). Oil is again approaching approximately $88+ per barrel as additional strikes involving large tankers in the Strait of Hormuz add geopolitical pressure. Oil closed fractionally above a major trend line yesterday and is pushing further above it today, so we have to take the possibility of a larger breakout seriously.

If that breakout holds, oil could move back above $90 per barrel, with $100 becoming possible if the conflict escalates. The alternative is continued sideways movement around current levels. With September 1 as the reference point and the November 4 elections roughly two months away, oil could continue chopping around this area rather than immediately accelerating higher.

Gold Futures (GC) are being hit again, but gold has now reached an important technical support area. I like the possibility of a short-term bounce here, but I would keep the emphasis on short-term because reaching support does not mean the larger decline is finished.

The VanEck Gold Miners ETF (GDX) is different. Gold is already at support, but GDX has not yet reached the level I want. The earlier bearish setup developed around the 0.618 Fibonacci retracement while Newmont Corporation (NEM) was making a new all-time high even though gold remained roughly 20% below its own all-time high. The next level I am watching for GDX is around 9265, which also aligns with the 0.382 Fibonacci retracement.

Silver Futures (SI) are also falling sharply and still have some room before reaching short-term support. Natural Gas Futures (NG) are pulling back toward a critical level around 283. The breakout still looks acceptable as long as 283 holds. A break below that level would materially weaken the setup.

Medtronic plc (MDT) reported earnings before the market opened, initially moved higher, and then gave back most of the move. With the stock roughly flat to slightly positive, there is not much directional opportunity there right now.

NIO Inc. (NIO) also reported earnings and initially gapped lower before recovering part of the decline. The larger structure remains weak after breaking an important trend line below, retesting that area, getting rejected, and continuing lower. I would become more interested around $3.30, potentially down toward $3.00, and then reevaluate the setup.

Bitcoin (BTC) is also pulling back, and the main concern for bulls is a developing mini bear flag. If that pattern confirms, there could be additional downside before a better swing opportunity develops.

That does not change the longer-term Bitcoin thesis. Bitcoin can still have long-term potential while showing a bearish short-term structure. The same debt and fiscal concerns supporting interest in gold, silver, and other physical assets also help explain the longer-term case for Bitcoin.

For now, I am not trying to predict which narrative wins. I am watching 4.8% on the U.S. 10 Year Treasury Yield, 7,570 on the S&P 500, the oil breakout above current resistance, 283 on natural gas, and whether Bitcoin's bear flag confirms. Respect the levels, stay patient, and let price tell us when the next move is actually real.