Standard & Poor’s is lowering its recommended portfolio weighting for U.S. equities from 45% to 40%. At the same time, the ratings agency is upping its cash recommendation to 40% from 35%.

S&P’s Investment Policy Committee made the call based on “technical and economic indicators that point toward further weakening in equity markets”. The recommended portfolio allocation also includes 10% non-U.S. equities and 10% fixed-income investments.

“Over the past month, the oil price has risen by about $5 per barrel and is an immediate worry to stock traders, as is the news of weaker-than-expected July employment numbers,” says Joseph Lisanti, S&P editor. “The S&P 500 broke through its previous support level of 1080, which had been holding for most of the year. Mark Arbeter, Standard & Poor’s chief technical analyst, sees the next level of support for the index at approximately 1,010.”

“We began turning more cautious on stocks in mid-June and have now lowered our recommended allocation to equities three times. Until the economy shows signs of renewed strength or the market bottoms firmly, we advise keeping only 40% of assets in domestic equities, 10% in foreign stocks, 10% in bonds, and 40% in cash,” says Lisanti.