Investors Remain Bullish as Technical Signals Strengthen Across U.S. Stocks

U.S. equity markets continue to trade with a bullish bias, supported by strong technical signals and resilient investor sentiment, even as pockets of caution emerge around positioning and geopolitics.

From a market structure perspective, technical indicators remain supportive. All sectors within the S&P 500 are currently trading above their 200-day moving averages — a configuration that has historically aligned with sustained bullish phases. The share of stocks trading above this long-term trend gauge has climbed to 68%, marking its highest level since August 2025.

Investor flows reinforce the optimistic tone. According to data from J.P. Morgan, retail investors allocated roughly $12 billion into equities over the past week. Activity in single-stock purchases has surged to a nine-month high, a sign of strong confidence — though historically such enthusiasm has sometimes coincided with local market peaks.

Similar dynamics are visible in credit markets, where risk appetite remains elevated and spreads stay compressed. While this supports equities in the near term, it also suggests limited room for complacency should macro conditions shift.

Geopolitics remain an important background factor. Signs of de-escalation around Iran following the U.S. decision to refrain from military action have helped stabilize risk sentiment. At the same time, the ongoing oil blockade affecting Venezuela continues to pose a potential source of volatility for energy markets.

Market snapshot

Futures point to modest gains. S&P 500 and Nasdaq futures are trading slightly higher, reflecting a neutral risk balance under conditions of moderate volatility.

• S&P 500 futures (SPX): Trading near 6,970, close to record highs within a local uptrend. Key support remains at 6,900.
• Nasdaq futures (NQ): Holding around 25,800, near the lower boundary of a medium-term ascending channel, with support at 25,500.

What’s driving markets today?

Investors are focused on several key catalysts:

• December industrial production data, which may offer fresh insight into the momentum of the U.S. manufacturing sector.
• Remarks from Federal Reserve Governor Michelle Bowman, as markets look for additional clues on the Fed’s assessment of economic conditions and monetary policy.
• A tentative rebound in technology stocks, supported by strength in the semiconductor sector following earnings from a major chip manufacturer.
• Weekly initial jobless claims, which came in slightly below expectations.
• The U.S. 10-year Treasury yield, which has shown minimal movement for a fifth consecutive week — one of the longest stagnation periods in the past two decades.

Sector performance

Cyclical sectors posted gains, led by retail, industrials, and aerospace and defense, while energy lagged.

Growth sectors showed mixed results. Semiconductors and solar outperformed, while cannabis and biotech finished lower.

Defensive sectors were mostly positive, with utilities leading and healthcare slightly weaker.

Cross-asset view

• Oil: Recovering modestly after a pullback, approaching a test of the $60 level.
• Treasury yields: Continue to trade in a flat range below 4.2%.
• VIX: Near 15.5, approaching the lower boundary of a short-term ascending channel.
• Gold: Consolidating near the upper boundary of its rising channel around 4,600.

Bottom line: The broader technical backdrop remains constructive, supporting a bullish bias in U.S. equities. However, elevated retail participation and tight credit conditions suggest the market is entering a more balanced phase, where discipline and selective positioning may matter more than broad risk-taking.

Technical analysis by: Lucas Grant, Senior Technical Analyst at Finmire.