STOCKS BOUNCE BACK — BUT TROUBLE STILL LURKS BELOW THE SURFACE
Markets staged a sharp recovery Monday, with the Dow surging 585 points to close at 44,173.64, clawing back losses from Friday’s slide. The S&P 500 rose 1.47%, and the Nasdaq led the charge, jumping nearly 2%—snapping a four-day losing streak.
But the rebound came despite glaring warning signs. A bearish “double top” has formed on the Dow chart after failing twice at the 45,000 level—turning that zone into stiff resistance. Bank of America’s Paul Ciana warned the index could drop to 42,500 or even 40,800, based on Fibonacci retracement targets.
Meanwhile, Berkshire Hathaway shares sank over 2% after a weak earnings report. Q2 operating income slid 4% YoY, and the conglomerate did zero buybacks this year, breaking a long-standing pattern—even as the stock dropped 15% from its May highs. The message? Even Buffett’s empire is cautious.
In the background, tech’s grip on the market hits a record 55%, eclipsing even the Dot-Com era. Defensive and cyclical sectors are shrinking fast, signaling a top-heavy market overly reliant on mega-cap names. The imbalance is growing—and few are prepared for what happens if tech falters.
Yes, stocks bounced. But beneath the green candles, this market remains on edge.