The S&P 500 closed at 7,773.95 (+0.66%) on October 5 (22:59 Moscow time). It is within about 0.5% of its 52-week high of 7,816.70. The yield on 10-year US bonds currently stands at 5.27% (as of October 6, 15:56 Moscow time), compared to a 52-week high of 5.349%.

The probability was estimated at roughly 18–20% (as of October 5). Second, oil prices fell following improved supply flows from the Persian Gulf (October 6).

However, the upcoming Fed meeting is not the only factor. The key issue is the rate at which long-term yields are rising: every spike forces a re-evaluation of stock valuations.

What could derail the rally

*   Fed minutes, October 7, 21:00 Moscow time. These are the minutes from the September meeting. If they contain significant "hawkish" language, the market will price in a potential hike for October or December. Kashkari has already outlined his stance: he expects one more hike this year and one in 2027, though he holds no firm opinion regarding October specifically.

*   Treasury auctions. 10-year bonds are set for auction on October 7 at 20:00 Moscow time, and 30-year bonds on October 8 at 20:00 Moscow time. Weak demand would push yields above 5.35%. This is the primary risk for stock valuations.

*   Inflation, October 14, 15:30 Moscow time. Previous figures (August): CPI +0.4% m/m, core CPI +0.3% m/m, annual inflation 3.4%. In August, core CPI exceeded forecasts (0.3% vs. an expected 0.2%). An upside surprise in this indicator is the most direct trigger for a correction.

*   Oil. Energy-related inflation will return if tensions between the US and Iran flare up again.

*   Data for October 15. Retail sales and PPI will be released at 15:30 Moscow time.

Key levels

Resistance: record high of 7,816.70 and the October 5 high of 7,794.35. Support: first level—SMA 10 and EMA 10 near 7,709 and 7,704; key zone—SMA 20 and SMA 50 near 7,673 and 7,665; for a deep correction—SMA 100 near 7,568; trend break—SMA 200 near 7,231.

The technical picture is bullish: daily and weekly charts show a "Buy" signal across all moving averages. The RSI stands at 59 on the daily chart and 64 on the weekly chart. However, there are also worrying signs. Williams %R near -6 indicates overbought conditions. The daily ADX is 9.3: the trend is weak, and the surge lacks strength confirmation. On the weekly chart, the MACD is below the signal line (histogram at -12.7), signaling weakening momentum. The Dragonfly Doji candle on October 1 signals neutrality.

Three scenarios leading up to October 27–28:

*   Soft landing (base case). The minutes are neutral, core CPI is around 0.3%, and 10-year yields remain in the 5.2%–5.35% range. The S&P 500 hovers near record highs and tests the area above 7,816.70. Given the weak ADX, this looks more like sideways movement (7,670–7,820) than a confident rally.

*   Hawkish shock (bearish). Core CPI exceeds expectations, the auction is weak, and the minutes are hawkish. Yields rise above 5.35%—a ​​new high since 2007. The index pulls back to the 20-day and 50-day SMAs (around 7,665–7,673). A break below this zone opens the way to the 100-day SMA (around 7,568). Expectations for an October rate hike would return to the 40%–70% range seen in late September.

*   Disinflation (bullish). CPI is softer, oil prices drop, and yields fall below 5.2%. The record high is broken, and the index reaches new peaks. This scenario would reduce the risk of an October rate hike and shift focus to December. However, even in this case, long-term yields would likely remain above 5%.

Conclusion

The stock market is currently reacting to Fed rate expectations, while bonds are responding to inflation and borrowing volumes. If 10-year yields remain below 5.35%, stocks may hold near record highs. A breakout above this level is a key risk signal.