Why the S&P 500 still can't manage to close above 7,000

By Christine Idzelis

The S&P 500 on Tuesday briefly traded above its previous record close, but was hit once again by tech-related turbulence

Investors will be focused on the U.S. jobs report on Wednesday morning.

The S&P 500's rebound ran out of steam on Tuesday, with the index again coming up short of closing at the 7,000 milestone, as investors await data on U.S. jobs and inflation.

While the S&P 500 SPX briefly eclipsed its previous record close, it retreated intraday and ended the session with a 0.3% loss at 6,941.81. The index has encountered some resistance in recent weeks that's prevented it from closing at the 7,000 level, with weak intermediate-term momentum acting as a headwind to a breakout, according to Fairlead Strategies founder and chartered market technician Katie Stockton.

The S&P 500 has been range-bound in 2026, "defined by that resistance just shy of 7,000," Stockton said in a phone interview. "Momentum has improved a little bit week over week, but not dramatically so, and it's not yet been enough to get it to new highs" in February, she said in a phone interview Tuesday.

The index, which closed at a record high of 6,978.60 on Jan. 27, fell modestly Tuesday as investors weighed a U.S. retail-sales report that was weaker than Wall Street expected. While the S&P 500 was back in positive territory for the year, losses in its information-technology sector XX:SP500.45 have made it a more challenging climb.

From a technical perspective, Stockton said she would want to see the S&P 500 book back-to-back daily closes above 7,000 to confirm a "minor breakout" for the index.

"Whenever we see a breakout from a range or consolidation phase, it acts as a positive catalyst," she said. "So we would welcome that as a bullish short-term development."

While tech, the S&P 500's biggest sector, is under pressure this year, U.S. stocks have been benefiting from a rotation into other sectors of the market. The S&P 500 finished Tuesday up 1.4% in 2026.

Value-oriented stocks in the S&P 500 have taken over leadership while tech-related equities have faltered, a shift that will probably continue to prop up the U.S. market this year, said Alessio de Longis, head of asset allocation and a senior portfolio manager at Invesco.

He expects value stocks to outperform this year, including in areas such as industrials, materials, financials and energy, which should help the S&P 500 keep up its momentum in 2026 even as tech may continue to encounter pockets of weakness.

The Russell 1000 Value Index RLV has jumped 6.5% so far this year, trouncing the Russell 1000 Growth Index's RLG 3% loss over the same stretch, according to FactSet data. The growth index is heavily weighted in big stocks like Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT) - megacap tech companies with outsize influence on the S&P 500's daily swings.

The S&P 500's information-technology sector fell 0.6% on Tuesday, while six of the seven closely watched companies held by the Roundhill Magnificent Seven ETF MAGS were in the red Tuesday, with the exchange-traded fund dropping 0.4%.

The biggest risk that de Longis sees for the bull market in U.S. stocks this year would be a sudden rise in inflation, which has been steady lately but still remains above the Federal Reserve's 2% target.

On Friday, investors will get a fresh reading on U.S. inflation from the consumer-price index, with de Longis expecting it to be in line with expectations. But before then, the stock market faces another highly anticipated report on the U.S. economy, with the Bureau of Labor Statistics scheduled to release its January jobs report on Wednesday morning ahead of the opening bell.

Read: Is the U.S. economy creating any jobs? Is inflation really slowing? Investors are about to find out.

While an unexpected contraction in the nonfarm-payrolls data would spook investors, a continuation of below-trend growth in jobs shouldn't worry investors much, according to de Longis. That's because it would likely keep an "easing bias" on the part of the Federal Reserve, he said, with investors welcoming potential interest-rate cuts this year against the backdrop of a stable economy.

In addition to the S&P 500's retreat Tuesday, the technology-heavy Nasdaq Composite COMP shed 0.6% and the Dow Jones Industrial Average DJIA edged up 0.1% to notch a fresh record peak. After Tuesday's drop, the S&P 500 was clinging to a weekly gain of 0.1%.

-Christine Idzelis

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02-10-26 1807ET