The S & P 500 is inching closer to a new all-time high, but chart experts are wondering if the rally is broad enough for more than a head fake. The broad index finished Tuesday’s session less than 1% below its record high. If the S & P 500 topped that threshold, it would mark the first fresh all-time high hit for the benchmark since February, before the market whipsawed in the aftermath of President Donald Trump’s tariff policy rollout. Now, market technicians are questioning whether the market’s upswing can include enough stocks to successfully trade at all-time highs over a longer-term period. Otherwise, they say the S & P 500 may still notch a new record in the coming days, but the climb to uncharted territory would likely be short-lived. “We’ve been arguing, really even since May, that there’s enough market cap working to push the S & P 500 to a new all-time high,” said Ari Wald, head of technical analysis at Oppenheimer. But, “there’s a very fine line between a top and a breakout, and we haven’t yet seen the conditions that would suggest that this breakout is sustainable.” .SPX ALL mountain S & P 500 Wald pointed out that only 44% of Russell 3000 stocks traded above their 200-day moving averages, meaning less than half of members are considered to be in an uptrend. That raises questions about sustainability for the market, especially given that the S & P 500 sits within striking distance of a new record. In other words, he said soldiers have to support generals to avoid a false breakout. On the other hand, Wald has also been watching the Russell 2000 , which he described as “pushing up” against its 200-day moving average. Positive momentum in these smaller-cap stocks can bode well for the broader market as the S & P 500 nears records, Wald said. “As go small caps, so goes the cycle,” Wald said. “If small caps can start to break higher here, that would support broader participation and a continuation of the cycle.” Other technicians have similar qualms about market leadership. Andrew Thrasher, founder of Thrasher Analytics, said some stocks haven’t dug themselves out of the hole in the same way the S & P 500 has. “It’s kind of a mixed bag,” Thrasher said. “We are seeing some positives, but we really want to see breadth expand out more if we get to those highs.” Still, some think the ingredients of a sustainable rally are all there. Craig Johnson, chief market technician at Piper Sandler, projects the S & P 500 will hit 6,600 around Oct. 15. He pointed to advance/decline lines as an indicator that a breakout to new highs could be in the cards. He also thinks such a run could have staying power. “I think there’s legs to this rally that can keep going,” Johnson said. “It’s way too premature to kind of start thinking about some of those things right now, but just because you get to my 6,600 doesn’t mean it has to be over.” A ‘recharged’ market? In the short term, technicians agree the S & P 500 should at least have enough momentum to touch all-time highs over the next several days. But for John Kolovos, head of technical strategy at Macro Risk Advisors, the remaining question is if the market has “recharged” enough to power a sustained move above current records. So far, Kolovos said he thinks the answer is yes. He said the market tends to consolidate before hitting all-time highs, as was seen with the S & P 500 largely trading sideways in recent weeks. “If anything, the market has been going through a bit of a stealth correction over the past month,” Kolovos said. Kolovos said a rollover in gold can help ignite animal spirits in the stock market. Down the road, he said outperformance in small caps and any signs of market breadth expanding can push investors to take on more market risk. Additionally, he said the Federal Reserve cutting interest rates would also boost trader sentiment. Beyond technology, Kolovos said the financial and industrial sectors are also doing well right now. These three sectors should be able to help propel the broader S & P 500 higher, he added. Looking ahead, Oppenheimer’s Wald said market participants should stay exposed to the large-cap growth names that have shown strength so far in this cycle. That’s evidenced by the performance of the Nasdaq 100 , which finished Tuesday’s session at a record closing level.
