"Healing Needs to be Done" in SPX, Factors Keeping RUT in Downtrend

• Market breadth, including the S&P equal weight and Russell 2000, is showing significant weakness, with the Russell 2000 nearing its 200-day simple moving average.
• Money flow is seeking relative safety in tech and large-cap stocks, leading to new highs in the Nasdaq composite, while interest-rate-sensitive sectors face negative revisions.
• Despite a cooler PCE print, 10-year and 30-year yields remain buoyant and at multi-year highs, creating headwinds for the broader market.
• Volatility is expected in early October due to quarter-end rebalancing and historical trends, with Q3 earnings from big banks potentially influencing market positioning.

The discussion highlights a bifurcated market where tech and large-cap indices show resilience, but broader market breadth, particularly small caps, is deteriorating due to rising yields. The analyst notes that 'healing needs to be done' in rate-sensitive sectors, and anticipates potential volatility in early October, despite a cooler PCE print.