Sevens Report Warns Weak Market Breadth Threatens S&P 500 Rally

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Tom Essaye cautions that rising concentration and falling participation raise risks of another sharp pullback.

Pay attention to these ’concerning’ market developments

U.S. equities fell Thursday as investors shifted focus from the Trump-Xi summit to surging bond yields and lackluster mega-cap tech earnings. The S&P 500 dropped nearly 1%, closing at weekly lows. While still up 16.25% year-to-date, Tom Essaye of Sevens Report Research said the rally is “deceiving,” with market breadth weakening beneath the surface.

Essaye noted that the top 10 companies now make up 40.5% of the S&P 500’s value — surpassing the tech bubble peak — with Nvidia alone at 8% after surpassing a $5 trillion market cap. Only 28.6% of S&P components are outperforming the index, and just 53% remain above their 200-day moving average. The NYSE Advance-Decline Line has also hit a 12-week low.

He warned that without a rebound in market breadth, risks of another “air pocket-style” drop or April-like correction are rising. “A broad-based rebound is needed to confirm that the bull market remains alive and well,” Essaye wrote.

Also, click here to view the full article published in Investing.com on November 1st, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

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Sevens Report: Oil Market Faces Record Surplus Despite U.S.-China Trade Truce

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Tyler Richey warns crude prices could fall to mid-$30s as 2026 supply glut looms.

An oil supply glut could sink prices to $35 a barrel next year. Why the U.S.-China trade truce won’t change that.

While President Trump’s trade truce with China offered a brief dose of optimism, Sevens Report Research warns it won’t offset an impending record oil surplus. Co-editor Tyler Richey told MarketWatch that the deal “does not change the current physical market math,” which still points to a 2026 supply glut averaging 4 million barrels per day, according to World Bank and IEA data. Richey cautioned that WTI crude could drop to the mid-$30s if forecasts hold, echoing the 2010s OPEC price war. Despite the tariff resolution, oil prices barely moved, as analysts see little change in supply-demand dynamics. Richey said only a major geopolitical shock or a global growth surge could shift the bearish outlook, noting fundamentals “remain tilted in favor of the oil bears.”

Also, click here to view the full article published in MarketWatch on October 30th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Updated Market Outlook (Post Earnings, Trade Truce and Fed Decision)

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What’s in Today’s Report:

  • Updated Market Outlook (Post Earnings, Trade Truce and Fed Decision)
  • Weekly Market Preview:  Will the Shutdown End This Week? (If Not, Possible Market Headwind)
  • Weekly Economic Cheat Sheet:  ISM PMIs and ADP Are Important This Week

Futures are solidly higher mostly on momentum following a generally quiet weekend of news.

There was no disruptive news over the weekend so investors focused on the results of last week:  1) Continued AI Enthusiasm, 2) Trade truce and 3) Fed rate cut/end of QT.

Economically, EU and UK manufacturing PMIs met expectations (50 and 49.7 respectively).

Today we do get some potentially important economic data via the ISM Manufacturing PMI (E: 49.4) and markets will want to see stability (so not falling too far from 50).  On the Fed front, there are two speakers today, Daly (12:00 p.m. ET) and Cook (2:00 p.m. ET) and the more dovish their commentary, the better for markets (given recent uncertainty around a December rate cut).

Finally, on the earnings front, ON ($0.59), PLTR ($0.12) and two moderately important AI linked tech companies, so markets will want to see solid results from both.

 

Sevens Report Warns of Rising Risks as S&P 500 Breadth Weakens

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Tom Essaye cautions that half of S&P 500 stocks are down YTD despite record-level index.

Why risks of a stock-market drop are rising amid extreme concentration in the S&P 500, Sevens Report warns

Nearly half of S&P 500 stocks are posting year-to-date losses even as the index trades near record highs, according to Sevens Report Research. Founder Tom Essaye warned this divergence signals growing market fragility. “That is not so healthy,” he said, noting the risk of another sharp “air pocket” drop or a broader April-style pullback is rising daily. The top 10 S&P 500 companies now make up 40.5% of the index—surpassing the concentration seen during the 2000 tech bubble. Essaye also flagged weakening market breadth, with the NYSE Advance-Decline Line hitting a 12-week low and only 53% of S&P 500 stocks trading above their 200-day moving averages, the lowest since June.

Also, click here to view the full article published in MarketWatch on October 31st, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Fed Caution, AI Bubble Warnings, and Trade Tensions Shape Market Mood

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Tom Essaye warns of rising correction risks as the Fed tempers rate-cut expectations.

Navigating the Aftermath: Market Outlook Post-Declines Amidst Trade Truce and Rate Uncertainty

September 2025 marked the start of the Federal Reserve’s rate-cutting cycle with a 25-basis-point reduction, but optimism quickly faded. In early October, warnings of a potential “AI bubble” intensified, with Sevens Report’s Tom Essaye cautioning that a burst could drag the S&P 500 down 10%–20%. JPMorgan CEO Jamie Dimon also warned of a possible sharp correction.

By October 29, the Fed cut rates again to a 3.75–4.00% range, but Chair Jerome Powell’s statement that a December cut was “not a foregone conclusion” cooled expectations. The cautious tone, combined with ongoing U.S.-China trade tensions and Trump’s tariff threats, weighed on sentiment.

Tech giants like Nvidia, AMD, Amazon, Meta, Microsoft, and Alphabet remain at the center of investor focus as their valuations drive market direction. Meanwhile, analysts and policymakers alike are watching whether Fed policy, AI enthusiasm, and trade diplomacy can keep markets stable through year-end.

Also, click here to view the full article on WRAL.com published on October 30th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Sevens Report: Powell’s Hawkish Tone “Not Bearish” for Stocks

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Tom Essaye says AI enthusiasm and trade stability outweigh Fed uncertainty.

Powell’s warning won’t derail the stock-market rally, maintains this strategist.

The Sevens Report, authored by former NYSE trader Tom Essaye, dismissed the idea that Jerome Powell’s hawkish comments Wednesday are bearish for equities. Powell’s remark that a December Fed cut is “not a foregone conclusion” sharply lowered market odds of a 25-basis-point cut—from over 90% to near 55%, which Essaye called “a coin flip.” Still, the report argues the bull case for stocks remains intact. Essaye cites four reasons: the Fed could still ease, Powell didn’t signal the end of rate cuts, AI optimism remains strong, and U.S.-China trade stability has improved. Essaye emphasized AI as the dominant driver, noting Powell’s remarks “don’t reduce the tailwind on risk assets.”

Also, click here to view the full article published in MarketWatch on October 30th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Five Concerning Market Breadth Developments

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What’s in Today’s Report:

  • Five Concerning Market Breadth Developments

Futures are modestly higher thanks to better than expected tech earnings.

APPL and AMZN both beat estimates and the stocks are rallying 2% and 12% respectively pre-market and pushing futures higher.

Economically, Chinese PMIs were mixed as the manufacturing PMI slightly missed estimates (49 vs. (E) 49.6).

There are no economic reports today but there are two Fed speakers, Logan (9:30 a.m. ET) and Bostic (12:00 p.m. ET) and given Powell’s hawkish surprise earlier in the week, markets will want to hear a dovish tone from both.

On earnings, the heart of the season is now over but there are still some notable reports today including: XOM ($1.78), CVX ($1.66) and ABBV ($1.77).

Finally, with President Trump back in the U.S., focus will shift to the government shutdown and any chatter about a resolution will be a mild market positive.

 

Bullish Argument

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What’s in Today’s Report:

  • Did the Fed Just Weaken the Bullish Argument?

Futures are slightly lower following a busy night of news, as major tech earnings were mixed while the Trump/Xi summit met widely held expectations.

On earnings, META, MSFT and GOOGL posted mixed results.  GOOGL beat earnings and the stock is up 8% pre-market while META and MSFT slightly underwhelmed.

Geopolitically, the Trump/Xi summit resulted in expected tariff reduction, soybean purchases and rare earth exports but didn’t contain any surprisingly positive breakthroughs.

Today focus will be on earnings with the last of the major tech firms reporting, including AAPL ($1.73), AMZN ($1.58) and, on the consumer spending front, MA ($4.31).

 

Fed Day

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What’s in Today’s Report:

  • Abbreviated FOMC Preview
  • Housing Data Takeaways

Futures are trading at all-time highs ahead of the Fed decision and multiple Mag-7 earnings releases due out after the close as President Trump made optimistic remarks about his three-hour meeting with President Xi tomorrow.

Economically, Australian CPI jumped to 3.2% vs. (E) 3.0%, up 1.1% from Q2’s reading of 2.1%.

Today, there are a few “second-tiered” economic reports due to be released including International Trade in Goods (E: $-90.0B), Wholesale inventories (E: -0.2%), and Pending Home Sales (E: 1.0%) but their market impact should be limited given the looming Fed decision.

It’s Fed Day with the FOMC Meeting Announcement due to hit the wires at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

Aside from the Fed decision, which could have a material impact on markets today despite the looming Trump-Xi meeting tomorrow, we are getting into peak earnings season with quarterly results due from major U.S. companies including VZ ($1.19), BA (-$2.46), CVS ($1.36), CAT ($4.52), META ($6.61), MSFT ($3.65), GOOGL ($2.26), and CMG ($0.28).

 

FOMC Preview: Is a Dovish Surprise Looming?

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What’s in Today’s Report:

  • FOMC Preview – Is a Dovish Surprise Looming?
  • Chart: An End to QT Means More Liquidity, More Stimulus

Futures are flat while most international markets are modestly lower as traders digest the sizeable two-day rally in stocks ahead of the October Fed meeting decision and several Mag-7 earnings releases.

Today, there are a handful of private-sector economic releases to watch including the Case-Shiller Home Price Index (E: 1.9%), the FHFA House Price Index (E: 0.1%), the Richmond Fed Manufacturing Index (E: -14), and Consumer Confidence (E: 93.4).

With the October FOMC meeting getting underway, expect a growing sense of Fed paralysis in equity markets to begin to take hold, however there is a 7-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and shake up stocks on an intraday basis.

Earnings season continues to peak this week with notable reports today including SOFI ($0.09), UNH ($2.80), PYPL ($1.19), UPS ($1.31), V ($2.97), BKNG ($96.10), and RCL ($5.67).

Bottom line, positive earnings and upbeat economic data would offer equity market tailwinds today with a Fed rate cut all but a certainty tomorrow, however, the trade war situation remains a “wildcard” risk that could spark risk-off money flows into tomorrows FOMC decision.