Stocks Slip as Rising Yields and Oil Put Key Support Levels at Risk

The market is under real pressure today. The S&P 500 Index (SPX), tracked through the SPDR S&P 500 ETF Trust (SPY), failed to hold above its declining trend line and slipped back into a weaker near term structure. The next important area is the upper boundary of the parallel channel at $732.54. That would be the third major test, and repeated tests increase the risk of a breakout inside the channel.

The Nasdaq 100 Index (NDX), tracked through the Invesco QQQ Trust (QQQ), also fell beneath support that had held the previous three pullbacks. Those tests are happening closer together now, which tells me the probability of a deeper move is increasing. One close below support does not confirm a full breakdown, but buyers need to reclaim that line quickly.

The VanEck Semiconductor ETF (SMH) is holding up better. It confirmed above the neckline of a possible head and shoulders pattern, then came back and held that neckline as support. That keeps the setup constructive, but repeated pressure on the neckline would put the breakout back in jeopardy.

The U.S. 10-Year Treasury Yield (US10Y) is one of the biggest risks here. It moved above the May 19 and May 20 pivot highs at 4.687% and has now risen for four straight sessions. When technology rallied during the earlier Middle East escalation, the 10 year yield was near 4% and briefly below 4%. Now it is near 4.6%, which is a much tougher environment for borrowing, capital spending, and equity valuations.

The probability of the Federal Reserve keeping rates between 3.5% and 3.75% dropped from 89% to 64%. For September, the market is now pricing a 56% probability of a 0.25% increase and a 25% probability of a double increase. Those probabilities will change with new economic data, but rate increases are clearly back in the discussion.

West Texas Intermediate Crude Oil (WTI) broke above its declining trend line as the Middle East conflict escalated. The next resistance level is $96.44. A daily close above today’s high would turn the former trend line into support near $86.83. Otherwise, broader support remains at $81.33.

Gold Futures (GC) briefly moved through three resistance trend lines, then fell back beneath the final two and returned to bearish consolidation. Silver Futures (SI) also failed to hold the upper 50% of its long-range channel. The next support is $56.28, followed by a larger downside level below $50, near $49 and change.

Alphabet Inc. (GOOGL) is testing an inclining trend line after earnings. A close below $317.90 would increase the probability of a move toward $301.32. Either level could produce a rebound toward the middle of the channel at $339.64. Tesla Inc. (TSLA) is testing the 0.618 Fibonacci retracement. That area could act like support, but Tesla first needs to reclaim the declining trend line near $327 to $328. Above that, the next resistance is near $343.

Intel Corporation (INTC) closed near $100.23 and reached about $113.72 after hours. Support is near $100, with the first pivot at $116.77 and resistance at $122.20. American Airlines Group Inc. (AAL) found support near $13.41, but higher oil prices remain a serious margin risk. If the stock begins forming a bearish flag, the next support is $11.95.

Cleveland Cliffs Inc. (CLF) gained 15.98%. Resistance sits at $11.45, then $11.54, $12.40, and $13.44. If the move fails, larger support is near $6.89.

Lockheed Martin Corporation (LMT) gained 10.54%. Resistance is at $569.22, followed by the area just below $600. Near-term support sits at $535.49.

Bitcoin (BTC) is testing the lower boundary of its parallel channel near $64,300. A daily close below that level would materially weaken the setup and increase the probability of another rejection.

Right now, patience matters more than prediction. SPY, QQQ, Bitcoin, Alphabet, Tesla, and SMH are all sitting near levels that need confirmation, while rising yields and stronger oil prices are making mistakes more expensive. Let price prove the move before committing to it.