I’m confused about the different graphic modes for base ps5

So I have a base ps5, and while I play I have a fps indicator on and it says it’s holding 120. I’ve been primarily on performance mode and it’s apparently holding 120 and things look pretty good.

I’ve been hearing that balanced mode could be the way to go, and I also realized I didn’t have my console resolution set to 4k, but rather 1440p. In balanced mode with vsync and vrr both on, my monitor still apparently is holding 120. But how can I tell what resolution is being put out? Unfortunately I was in a night scene and didn’t have time to get to daytime to really see the difference in visuals. What is the apparent best setting for base ps5?