S&P 500 Holds Above 200-Day as AI Spend Supports

The S&P 500 closed at 772.31 on Oct. 28, up from 645.57 in November 2025, and remains above its 200-day moving average near 725.23, a sign the longer-term trend is still intact even after recent turbulence. Its 50-day average sits near 766.83, showing the index is trying to stabilize after a drawdown that briefly pushed it close to technical support.

That backdrop helps explain why the market’s mood looks more fearful than the price action itself. Adalytica’s S&P 500 trade signals show sentiment at 17, or “Fear,” even as awareness is at 99 and the index has bounced 11% over the past seven days. In other words, investors are still skeptical — and that skepticism can be fuel for further gains if earnings and macro data avoid a hard landing.

The macro picture is mixed, but not recessionary enough to break the bull case. US unemployment is projected around 4.09% for October, essentially unchanged near 4.1%, while CPI is forecast at 335.8, implying inflation remains above the Federal Reserve’s comfort zone but not in the kind of reacceleration that typically crushes equities. That combination is awkward for bonds, but it is not fatal for stocks, especially when growth remains positive and corporate America keeps producing cash flow.

Treasuries tell the same story from the other side. The TLT bond ETF has climbed back above its 50-day moving average, with Adalytica’s bond signals flashing “Extreme Greed” sentiment at 95, a sign investors are reaching for duration protection even as stocks hold up. That split matters: it points to a market hedging for slower growth rather than outright crisis, a backdrop that can support quality large caps and long-duration growth stocks.

The real investable narrative is that the next leg of this market may not be driven by broad economic expansion at all, but by concentrated capital expenditure in AI, cloud, power and infrastructure. If the market is underestimating anything, it is the durability of the spending cycle behind compute, data centers, energy delivery and semiconductor supply chains. That is where the asymmetric opportunity still sits.

For investors, the lesson is straightforward: do not mistake volatility for the end of the cycle. As long as the S&P 500 holds above its 200-day moving average and macro data avoid a sharp deterioration, the burden of proof remains on the bears. A fifth straight up year is no certainty, but the market is still behaving as if it can happen — and that keeps the case alive for staying invested in AI infrastructure, mega-cap tech, utilities tied to power demand and the broader picks-and-shovels beneficiaries of a capital-spending supercycle.