The three major U.S. stock indices all fell, with technical indicators showing "overheating" warnings

According to the Zhitong Finance APP, on Monday, all three major U.S. stock indices fell, as market sentiment was hit by Trump's renewed tariff plan, leading investors to take some profit ahead of the holiday. The Dow Jones Industrial Average fell by 0.94%; the S&P 500 index dropped by 0.79%; and the NASDAQ Composite Index declined by 0.92%. Although the S&P 500 and NASDAQ indices are still hovering near historical highs, a widely watched market technical indicator has quietly lit up a "warning light." In the past eight trading days, the S&P 500 index has broken through its upper Bollinger Band seven times, a phenomenon typically seen as a signal of "overheating" in the market, which may indicate a short-term pullback. Jason Goepfert, a senior research analyst at SentimenTrader, pointed out that the S&P 500 has stood above the upper Bollinger Band for several consecutive days, which is particularly noteworthy near current historical highs. In a memo to clients, he wrote: "Is this a manifestation of extraordinary momentum, or a typical sign of 'too fast a rise'?" The Bollinger Bands were created by financial analyst John Bollinger in the 1980s to assess whether stock prices are in an "overbought" or "oversold" state by calculating the moving average of a stock over the past 20 days and adding two standard deviation ranges above and below it. Breaking through the upper band typically indicates that the market may be overly optimistic in the short term, while falling below the lower band may suggest overselling. Data shows that since 1997, whenever the S&P 500 triggers this signal at multi-year highs, the index tends to decline in the following week. However, the medium to long-term trend is not singular: within six months of triggering the signal, the S&P 500 has risen more than 5% ten times and fallen more than 5% ten times. Among these, only in 1966 and 2000 did the situation ultimately lead to a bear market. This market turbulence is also influenced by Trump's "tariff stick" reactivation. On Monday, Trump posted a letter to the leaders of Japan and South Korea on his social media platform, stating that starting from August 1, exports from the two countries would face a 25% tariff. The market had originally hoped that an agreement could be reached by July 9 to avoid the U.S. imposing so-called "reciprocal tariffs" on "non-cooperative countries," but this hope has now been overshadowed again. In April of this year, Trump first proposed the concept of "reciprocal tariffs," triggering a strong market reaction. At that time, Wall Street was concerned that high tariffs would drag down global trade and ultimately impact the U.S. economic recovery. In Monday's trading, the small-cap index Russell 2000 saw the largest decline, dropping by 1.55%. Despite the technical indicators sending short-term warning signals, Goepfert analyzed historical data and found that when the S&P 500 maintains strong momentum, the NASDAQ and Russell 2000 small-cap indices tend to perform better in the future. Data shows that after similar trends occurred in the past, the median return of the Russell 2000 within two months was +4.8%, while the S&P 500 was -0.7%. Five months later, the probability of the NASDAQ achieving positive returns was 80%, higher than the S&P's 68%