The S&P 500 maintains a cautiously bullish stance as US yields remain elevated amid ongoing liquidity stress. With the TGA balance at $928B, money remains trapped within government accounts, limiting market liquidity. Today’s NFP release—expected at ~52K jobs—signals improvement but still underscores labor market softness.
A sharply divided FOMC is complicating the December rate-cut outlook, with increasing pushback against easing. Beginning December 1, the Fed will stop rolling off Treasuries and reinvest proceeds, reopening a key demand channel for US government debt.
A rate cut carries dual implications: it may reignite inflation, yet it could also offset rising unemployment, support weaker sectors, relieve regional banks facing liquidity asymmetry, and help leveraged companies by reducing interest coverage stress. As Chair Powell put it, “there is no risk-free path.”
Key Levels: Support 6,593.2 │ Resistance 6,789.0
Investor Takeaway: RSI at 69 trending upward; MACD shows emerging selling pressure. Liquidity constraints + Fed uncertainty keep volatility elevated despite constructive trend.