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• The S&P 500 has completed its first Fibonacci target at 7,805, with a correction of around 5% to 8% seen as a potential buying opportunity.
• The Dow Jones is also at a mature stage after completing its Fibonacci targets, with support around 51,523 and 49,918.
• The Nasdaq remains the biggest risk, with a bearish triangle still pointing toward 26,768 unless the 30,337 level is broken.
The US stock market has continued to show remarkable strength, but that strength could eventually give way to a correction before the next leg higher.
The current technical view is that the major indices could experience a pullback of roughly 5% to 8% during the final months of the year. Rather than signalling the end of the broader bull market, such a move could create an opportunity to build positions in some of the strongest stocks in the market.
The S&P 500, Nasdaq and Dow Jones are all at relatively advanced stages of their current moves, although their technical structures differ considerably. The Nasdaq 100 in particular has already shown more weakness than the other two major indices.
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S&P 500 Has Reached an Important Fibonacci Target
The S&P 500 has climbed to around 7,805, completing a Fibonacci target that had been identified several years ago. The level is significant because the Fibonacci setup was established well before the current move. The analysis had been tracking it since around 2020, meaning the target was in place long before the index reached it.
The S&P 500 previously stopped around 6,120, followed by a sharp correction. That decline provided an opportunity to build positions using a dollar-cost averaging strategy. Two positions established during 2025 have since generated returns of approximately 20% and 34%, respectively.
With the index now at 7,805 and the first Fibonacci target completed, the market is considered relatively mature from a technical perspective. That does not automatically mean a major selloff is coming. The S&P 500 could continue rising, particularly because the Nasdaq still has another Fibonacci target ahead.
The preferred scenario, however, involves a correction before the next major advance. A decline of around 5%, 6% or 7% would bring the S&P 500 toward a major support area around 7,300 to 7,314. The moving average also represents an important support level along the way.
That 7,300 to 7,314 region is therefore the key area to watch. A return toward it could provide a more attractive entry point for high-quality stocks. The exact timing remains impossible to determine from the technical setup. The expectation is simply that a meaningful correction could develop during the remaining months of the year.
Dow Jones Also Looks Ready for a Pullback
The Dow Jones is in a similar position. Its Fibonacci targets have already been reached, suggesting that the current move has also become technically mature. The index could therefore benefit from a period of consolidation or correction.
An important support area sits around 51,523. A move back to that level would represent roughly a 4% to 5% decline from current levels. A deeper correction could take the Dow toward 49,918, which would represent roughly 6% to 7% downside.
The Dow could therefore fall somewhat more than the S&P 500 during a broader market pullback.
A previous rectangle formation had provided an important technical signal ahead of the market’s August advance. The next major question is whether the index can hold its broader structure while moving back toward these support levels.
Nasdaq 100 Carries the Biggest Risk
The Nasdaq 100 presents a more complicated picture. The index has already fallen around 11% to 12% in the move being analyzed, with semiconductor stocks taking much of the pressure. Its technical structure also contains a bearish triangle that remains active.
The triangle has a downside target around 26,768, while 30,337 represents the level that would invalidate the formation.
That distinction is important. The bearish target remains in play as long as the Nasdaq stays below the triangle’s invalidation level. A move above 30,337 would therefore make the technical outlook considerably more constructive.
The Nasdaq’s strong long-term uptrend could also produce a rebound around its moving average. Historically, a test of the moving average can trigger buying, and the strength of the broader trend makes that possibility particularly relevant.
At the same time, the Nasdaq has already completed one Fibonacci target while another remains outstanding at 32,489.
That leaves room for a two-stage scenario: the Nasdaq could first experience a correction, potentially retest the triangle’s downside target, and then resume its longer-term advance.
The preferred longer-term target is around 39,489, potentially reached between December, January and February. Beyond that, there is an even more distant target around 42,000, although that would be a multi-year objective rather than a near-term forecast.
Why Late October and November Could Matter
The timing of the correction is another important part of the thesis. September has historically been considered a difficult month for stocks, but the market’s behavior during Trump’s current term has differed from that traditional seasonal pattern.
The analysis points to the market remaining relatively firm through September in recent years, with more meaningful opportunities emerging around late October and early November.
Last year, an opportunity appeared around November after a relatively small correction. The year before, there was a sharper decline beginning in July and continuing into August, followed by another opportunity around the beginning of September.
The broader observation is that market corrections during Trump’s term have sometimes arrived later than the traditional September weakness would suggest.
That is why the current expectation centers on a possible correction around late October or November, although September remains a possibility.
The ideal scenario would be a correction of roughly 5% to 8%, creating attractive entry points without fundamentally damaging the broader uptrend.
Using Correction to Buy Strong Stocks
The strategy is therefore less about predicting a market crash and more about waiting for better entry prices.
At current levels, the approach is to avoid aggressively expanding the portfolio and instead keep a list of strong companies under observation.
The summer period is being treated as preparation time, allowing investors to identify the stocks they would want to own before a correction arrives.
The idea is straightforward: if the S&P 500 falls toward its major support around 7,300 to 7,314, or the Nasdaq reaches a deeper technical support zone, the resulting weakness could create an opportunity to buy companies that remain fundamentally and technically strong.
The semiconductor sector is particularly interesting in this context. Semiconductor stocks have already contributed to the Nasdaq’s greater weakness, and the sector is being viewed as an area that could offer attractive opportunities if prices fall further.
The Bigger Picture Remains Bullish
Despite the expectation of a correction, the broader market thesis remains positive.
The S&P 500 and Dow Jones have already completed major Fibonacci objectives, while the Nasdaq still has another target at 32,489. This supports the possibility that the major indices continue higher after a period of weakness.
Under the bullish scenario, the correction becomes the setup for another advance through November, December, January and potentially February, eventually taking the Nasdaq toward 39,489.
The key risk is that the Nasdaq’s bearish triangle remains active. Until the 30,337 invalidation level is broken, the downside target around 26,768 remains part of the technical picture.
For investors, the message is therefore less about chasing the market at current levels and more about preparing for the next opportunity. A correction of 5% to 8% could provide the entry point being sought, particularly in high-quality stocks and the semiconductor sector.
The timing remains uncertain, and no exact date can be assigned to a market correction. The important levels, however, are already defined: 7,300 to 7,314 on the S&P 500, 51,523 and 49,918 on the Dow Jones, and 30,337 and 26,768 on the Nasdaq.
If the broader uptrend remains intact, a pullback toward those areas could become one of the more important buying opportunities of the final quarter.

US market saw a mixed close as the S&P 500 and Nasdaq dipped, primarily due to tech giants like Alphabet facing investor scrutiny over AI spending. The Dow, however, edged higher, supported by healthcare and industrial gains. Falling oil prices offered some relief, but a hawkish Federal Reserve stance and upcoming inflation data are keeping investors cautious about future rate hikes.
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