Cooling Down After the Noise: Why Has the U.S. Stock Market's Technical Rebound Peaked?

After two consecutive trading days of emotional recovery, the U.S. stock market began to reveal its true operating state today. On the surface, although the Dow Jones Industrial Average slightly refreshed its high with the support of traditional value stocks, the Nasdaq 100 Index and the S&P 500 Index, which better reflect market risk appetite and growth momentum, were clearly under pressure in key resistance areas, with the upward momentum tending to stagnate.

This divergence is not accidental but repeatedly reminds the market of a fact: the rise over the past two days is closer to a technical repair after oversold conditions, rather than the starting point of a new trend. As the rebound momentum gradually weakens, short positions are regaining pricing power.

I. Insufficient Long Momentum, Rebound Entering Exhaustion Rally

The overall characteristic of today's market can be summarized in one sentence: positive news is difficult to push prices higher. Long positions originally tried to repair the trend structure with the help of the rebound in the previous two days, but when the index approached the previous dense trading area, buying orders became significantly more cautious, and the driving force quickly diminished.

This lack of momentum is not caused by short-term emotional fluctuations but is the result of simultaneous pressure from technical aspects and underlying fundamental concerns.

II. The "So Close Yet So Far" of 6,986 Points

The details of today's market are quite symbolic. The S&P 500 Index hit a high of 6,986.83 points during the session, just a step away from the psychologically and technically significant 7,000-point mark, but it never managed to break through.

It is precisely this last dozen points that clearly exposes the true state of long positions: neither funds nor confidence are sufficient to support the index in breaking through the heavy pressure zone above. Under the framework of technical analysis, this kind of repeatedly blocked movement before a key integer level often has greater warning significance than a direct decline—it means that the rebound has a clear fracture at the stage where volume and consensus are most needed.

III. Fundamental Cracks Appear, Consumer Momentum Slows

On the fundamental side, the December retail sales data released today (previously delayed due to tariff expectations and a short-term government shutdown) were significantly lower than market expectations.

The data shows that retail sales were flat month-on-month (0.0%), falling short of the market expectation of 0.4%; the more forward-looking core retail control group data fell by 0.1%. This indicates that the U.S. consumer side has shown signs of substantial cooling after entering early 2026.

It is important to be vigilant that although weak data has strengthened interest rate cut expectations in the short term, at current valuation levels, the market's focus has gradually shifted from "whether liquidity is loose" to "whether growth is slowing." Against this backdrop, interest rate cut expectations are more interpreted as a signal of recession rather than a direct positive for risk assets.

IV. AI Sector Diverges, Leading Rally Logic Weakens

As an important driving force in this round of market movement, the AI-related sector also released warning signals today.

Although $NVIDIA(NVDA.US) and $Taiwan Semiconductor(TSM.US) still maintain strength at the order level, the movement within the sector has clearly diverged. $Alphabet(GOOGL.US) faced stock price pressure in the context of bond issuance, and heavyweight stocks like Microsoft also failed to effectively recover key technical moving averages.

The market is shifting from the previously highly consistent expectations for the AI theme to a re-examination of profit realization capabilities and valuation rationality. When core heavyweight stocks struggle to form synergy and their movement tends to be sideways, the foundation for a broader market rebound is also weakened.

Trend Unchanged, Defense First

Overall, the current market state is closer to its true face: the overall trend remains cautious, and the rebound is only a phased repair within a downward channel, not a confirmation of a trend reversal.
 

The inability of long positions to sustain the rise at key levels indicates that market consensus is shifting from "buying the dip" to "selling the rally." Before the index can effectively break through and stabilize above core resistance levels, any impulsive rebound is more suitable as a window for risk management and position adjustment.

Subsequently, it is crucial to pay close attention to whether the market experiences a "double-dip" or even deeper retracement. At this stage, maintaining sufficient liquidity and defensive flexibility is clearly more important than rushing to bottom-fish.