Amid surging international oil prices and heightened uncertainty in the Middle East, U.S. stock markets faced renewed pressure on Thursday. The S&P 500 index fell below a key technical support level, sparking concerns about further declines ahead. At the close, the index was down 0.27% at 6,606.49 points, marking not only its lowest closing level since late November of last year but also its first drop below the 200-day moving average since May 2025. This technical level is widely regarded as a crucial indicator for assessing long-term market trends, and a break below it is often interpreted as a potential bearish signal.
Market analysts noted that although the index has only retreated about 5% from its historical peak, the internal market structure has deteriorated significantly. Data shows that within the S&P 500 components, more than 80% of stocks in the communication services, consumer discretionary, and technology sectors are already in a downtrend. Additionally, approximately 76% of financial sector stocks are also showing weakness. The advance-decline ratio has skewed noticeably toward declines, indicating a contraction in market breadth.
From a sentiment perspective, the put/call ratio in the options market continues to rise, reflecting increased investor risk aversion. Some analysts suggest this shift may signal that the market is gradually entering a "capitulation selling" phase, where investors begin offloading risk assets in a concentrated manner.
The core pressure on the market remains energy prices. As conflicts in the Middle East escalate, Brent crude and WTI crude prices remain elevated, raising concerns that rising energy costs could fuel inflation and hinder economic growth. This factor has become a key variable driving recent market movements.
From a technical standpoint, downside risk has opened below the 6,600-point level. Institutional investors are closely monitoring the 6,500-point support level; a break below it could trigger more widespread panic selling. Based on current trends, the S&P 500 faces the risk of a "technical correction"—a 10% decline from its January peak of 6,978 points—or even a potential slide into bear market territory with a 20% drop.
However, some viewpoints suggest that large-cap technology stocks could still serve as a market support force at some future stage. Similar to the rebound following the 2022 interest rate hike shock, tech giants once led a market recovery. Yet, under current conditions, investor confidence remains weak, and the overall market sentiment is subdued, with trading heavily dependent on shifts in macroeconomic variables.