Stocks finished the day mostly lower but well off intraday lows, after the S&P 500 had been down around 1%. I would not call this a watershed move for the index, but the market did fall on a Treasury bill settlement day, and that is important because it confirms the pattern remains intact for now.
Thursday is the next T-bill settlement day, and we should begin to see significantly higher bill issuance starting next week. If the spring patterns continue to play out, many market participants may find themselves completely offside, with no idea what hit them.
The only thing that appeared to save the market today was the gamma positioning heading into Friday. The 7340-7350 area remains sticky and is likely to provide support through the end of this week. That should change next week once the monthly options expiration gamma rolls off. At the very least, today’s move allowed the gap from May 7 to fill.
The VIX was also lower on the day. It isn’t often you see this type of spot-down, vol-down session, and I think it supports the idea that today’s rebound from the lows may have been facilitated by put positions being closed out in the S&P 500. The VIX peaked around midday, just as the S&P 500 fell into the gamma support area, and then declined steadily for the rest of the session.
Additionally, the CPI report came in hotter than expected on the core reading, which helped send Treasury yields higher. This pushed the 30-year Treasury yield to around 5.03%, marking its highest close since May 2025.
Right now, the 30-year is at an important level because if it manages to break out from here, it would mean moving above the highs reached in 2023.
The 10-year Treasury yield also finally cleared resistance and the downtrend around 4.45%. If it follows through on Wednesday, yields could be headed significantly higher, given the importance of completing this multi-year consolidation pattern.
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