US stock markets closed in positive territory on Tuesday, defying heavy selling pressure from IBM, which suffered a sharp decline and emerged as the worst performer in the S&P 500.
The broader index managed to post gains despite the significant drag from the software giant, highlighting a persistent divergence between large-cap tech laggards and the rest of the market.
According to reports from Borsen and MarketWatch, a prominent fund manager has flagged a potential downside risk of up to 10% for equities, citing excessive positioning and valuation concerns.
The resilience of the broader market comes amid growing caution from asset managers.
According to reports from Borsen and MarketWatch, a prominent fund manager has flagged a potential downside risk of up to 10% for equities, citing excessive positioning and valuation concerns.
This warning adds to the chorus of strategists who have recently pointed to the 6,000 level as a near-term ceiling for the S&P 500, a theme that has gained traction following recent profit-taking in parabolic leaders.
IBM’s steep drop underscores the ongoing rotation away from certain legacy tech names, a trend that has widened the performance gap between the S&P 500 and the Dow Jones Industrial Average in recent weeks. While the index as a whole remains supported by strength in other sectors, the volatility signals have begun to diverge, testing critical support levels that traders have been monitoring closely.
Investors are now looking ahead to the Federal Reserve’s policy decision on July 29 for further guidance on the interest rate path.
With the central bank’s stance likely to influence market sentiment significantly, the coming weeks will be crucial in determining whether the current resilience can hold or if the warned correction materializes.