S&P 500 Holds the Neutral Zone, the 2-Year Yield Points to a September Fed Hike, and What SpaceX's IPO Tells Us
By Dave Keller, CMT, Chief Market Strategist, StockCharts.com | Founder, Market Misbehavior Last updated: July 31, 2026
Quick answer: The S&P 500 is closing out July in a neutral range between 7,300 and 7,600, with Amazon's ~15% Friday rally driving consumer discretionary strength while Apple slid after a weak earnings reaction. The 2-year Treasury yield is still signaling a Fed rate hike at the September meeting, and the SpaceX IPO's post-listing drop looks a lot like Facebook's 2012 debut.
Key takeaways:
S&P 500 is range-bound: 7,300 reads bearish, 7,600 reads bullish, 7,500 is the midpoint — and the index is finishing July right in the middle of that range.
Amazon rallied roughly 15% on Friday, leading consumer discretionary and communication services higher; Apple dropped after an earnings disappointment, breaking its run as the strongest chart in the Magnificent Seven.
The 2-year Treasury yield has historically led Fed policy changes by about six months, and it's been climbing through 2026 — lining up with a September hike.
Materials, energy, and industrials (the "MEI" group) move together as late-cycle leadership. Watch for energy to start leading, followed by staples and utilities, as a signal the market may be nearing a top.
SpaceX's IPO chart mirrors Facebook's 2012 debut: heavy anticipation, a sharp spike, then a hard drop once the market questioned the price against near-term earnings.
Where the S&P 500 stands heading into August
Amazon rallied about 15% Friday, pulling consumer discretionary and communication services higher, while Apple dropped after an earnings disappointment, breaking its run as the strongest chart among the Magnificent Seven. Materials lagged and breadth finished the week neutral.
The index tested support at 7,300 on Wednesday and looks set to finish July right in the middle of the June–July range — essentially back where it was in early May, when it first touched 7,500. I read anything above 7,600 as bullish, anything below 7,300 as bearish, with 7,500 as the midpoint. Right now we're in the neutral zone, which means this is more a stock-picking and security-selection environment than an index-level bet.
How do you chart the yield curve with the S&P 500 on a log scale?
Chart the 10-year Treasury yield minus the 2-year (ticker one minus ticker two) — known as the "2/10 spread." Wide means a normal curve, narrow means flat, negative means inverted. Add the S&P using the Price indicator plus the "log" parameter to switch to a logarithmic scale, which shows true percentage moves over long periods instead of distorting them like an arithmetic scale does. When the curve inverts and then re-normalizes (mark it with a red vertical line), a recession usually follows, though it won't be officially confirmed for months.
What is the Performance Spread indicator, and how is it different from a ratio chart?
A standard ratio chart shows direction, but its percentage number is close to meaningless as an actual return figure. Performance Spread, a newer StockCharts indicator, fixes that. Use the syntax "performance spread" plus your benchmark ticker, and it calculates your actual return relative to that benchmark, live and updating. The line looks the same either way — only the y-axis math changes — but Performance Spread is the one to use if you want the number to mean something.
What does the 2-year Treasury yield tell you about the next Fed rate hike?
The 2-year has historically led Fed policy changes by about six months, and it's been climbing through 2026, lining up with the market pricing in a September hike. I wouldn't read too much into 90 minutes around one Fed meeting, though. Zoom out: the dollar is breaking down after a longer uptrend, gold is flat, and the yield curve has been steepening for a month, finishing near its steepest point since January. That combination points more toward rising inflation expectations than a Fed that's pulling back.
Materials vs. industrials: which is the better economic barometer?
Neither, really. Both are part of the "MEI" group (materials, energy, industrials) and tend to move together as late-cycle leadership while the economy expands. What matters more is watching for energy to start leading, followed by staples and utilities, since that rotation usually signals a market top even while the economic data still looks strong.
Is the volume profile indicator worth using?
Not much anymore in my own process. It plots volume concentration by price level, and areas of heavy concentration tend to become stronger support and resistance zones. I leaned on volume-based tools much more heavily in the 1990s, but they've become less reliable as market structure has changed and trading has decentralized.
What does the SpaceX IPO tell us about upcoming IPOs like Anthropic, OpenAI, or Databricks?
It reminds me a lot of Facebook's 2012 IPO: huge anticipation, a sharp initial spike, then a hard drop once the market started questioning the price against realistic near-term earnings. I don't own SpaceX yet, but I wouldn't rule out a starter position now that it's down to around $110 a share, if your time horizon is long enough. Short-term, though, the chart shows distribution and little buying interest, so I can't make a technical case for it at this particular moment.
Want deeper dives into something like this? Grab my free investor course and join thousands of other investors who get exclusive insights from me delivered straight to their inbox. Sign up here.
