US Equities
Uptrend persists as inflation pressure challenges breadth
The medium-term uptrend is still favorable, but adverse inflation and rate evidence is reinforced by weak single-day breadth.
U.S. equities retain a favorable medium-term technical regime, with most represented exposures still in uptrends. AI investment and firm private demand support fundamentals, while sticky inflation and the Fed inflation focus keep valuation pressure elevated. Technical and News & Events signals conflict, and the weak single-day breadth adds a near-term caution flag without overturning the broader uptrend.
Broadly favorable uptrend with balanced risk
Moderate headwind balance
Technical conditions are favorable, but News & Events evidence is adverse and raises durability risk.
Broad U.S. selling challenges the medium-term uptrend
The single-day technical breadth shows 1 advancing and 9 declining included symbols, with a combined bearish direction and low risk. No material post-close News & Events force was identified inside the Step 2 daily window. The single-day picture conflicts with the medium-term view.
- Direction
- Bearish
- Opportunity
- Cautious
- Risk
- Low
- vs medium term
- conflicting
7 market forces
Each force is a discrete piece of evidence with a direction, a stated transmission mechanism, and a link to the document behind it. Counterarguments are shown, not omitted.
Tailwinds (2)
AI capex and profit growth support U.S. fundamentals
1 to 4 weeksFederal Reserve Chairman Kevin Warsh said inflation remains above the 2% target, with 12-month PCE inflation at 3.7% and six-month inflation at 4.1%, while also describing strong AI-related capital spending and corporate profits.
Why it matters here: The same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
Counterpoint: High expectations make the durability of growth important.
Instruments affected10
- SPYThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- QQQThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- DIAThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- IWMThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- RSPThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- XLFThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- XLIThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- XLVThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- XLYThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
- SMHThe same speech documents roughly 9% equipment/intangibles investment growth and more than 20% S&P 500 profit growth, supporting represented growth and broad-market exposures.
Private demand and corporate profits remain firm
1 to 4 weeksBEA estimated second-quarter real GDP growth at a 1.5% annual rate versus 2.1% in the first quarter; real final sales to private domestic purchasers rose 4.2%, and current-production corporate profits increased by $400.9 billion.
Why it matters here: Real final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
Counterpoint: Headline GDP still decelerated.
Instruments affected10
- SPYReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- QQQReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- DIAReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- IWMReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- RSPReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- XLFReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- XLIReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- XLVReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- XLYReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
- SMHReal final sales to private domestic purchasers rose 4.2% and current-production profits increased sharply, supporting broad earnings fundamentals.
Headwinds (5)
Payroll contraction raises consumer-growth risk
1 to 4 weeksBLS reported a 23,000 decline in nonfarm payroll employment in July and an unemployment rate of 4.1%.
Why it matters here: A 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
Counterpoint: The unemployment rate remains historically low at 4.1%.
Instruments affected10
- SPYA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- QQQA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- DIAA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- IWMA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- RSPA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- XLFA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- XLIA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- XLVA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- XLYA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
- SMHA 23,000 payroll decline raises risk to consumption and cyclical earnings despite a still-low unemployment rate.
Headline GDP growth decelerates
1 to 4 weeksBEA estimated second-quarter real GDP growth at a 1.5% annual rate versus 2.1% in the first quarter; real final sales to private domestic purchasers rose 4.2%, and current-production corporate profits increased by $400.9 billion.
Why it matters here: Q2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
Counterpoint: Private domestic demand remained strong.
Instruments affected10
- SPYQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- QQQQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- DIAQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- IWMQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- RSPQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- XLFQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- XLIQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- XLVQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- XLYQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
- SMHQ2 real GDP growth slowed to 1.5% from 2.1%, a headwind for cyclical earnings expectations.
Hormuz escalation raises growth and inflation risk
1 to 5 daysReuters reported the first known direct U.S.-Iran military exchange in about a month, including U.S. strikes on launchers on Larak Island and Iranian missile retaliation; visible commodity-vessel transit through the Strait of Hormuz fell to five per day over the weekend, and shipping disruptions remain material.
Why it matters here: Renewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
Counterpoint: OPEC+ supply additions and continued partial Gulf shipments reduce the risk of a complete supply stop.
Instruments affected10
- SPYRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- QQQRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- DIARenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- IWMRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- RSPRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- XLFRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- XLIRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- XLVRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- XLYRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
- SMHRenewed military exchanges and constrained Strait traffic raise energy costs, inflation uncertainty and global risk premia for the represented equity or crypto exposures.
Sticky PCE inflation limits valuation relief
1 to 4 weeksBEA reported July PCE inflation of 0.2% month over month and 3.7% year over year, core PCE inflation of 3.3% year over year, and real PCE essentially unchanged on the month.
Why it matters here: Headline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
Counterpoint: Nominal income and disposable income still increased.
Instruments affected10
- SPYHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- QQQHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- DIAHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- IWMHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- RSPHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- XLFHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- XLIHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- XLVHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- XLYHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
- SMHHeadline and core PCE inflation remain well above 2%, while real consumption was flat in July, pressuring valuation-sensitive and consumer exposures.
Fed inflation focus keeps discount-rate pressure elevated
1 to 4 weeksFederal Reserve Chairman Kevin Warsh said inflation remains above the 2% target, with 12-month PCE inflation at 3.7% and six-month inflation at 4.1%, while also describing strong AI-related capital spending and corporate profits.
Why it matters here: Above-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
Counterpoint: Strong capex, profits and credit conditions offset part of the pressure.
Instruments affected10
- SPYAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- QQQAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- DIAAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- IWMAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- RSPAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- XLFAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- XLIAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- XLVAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- XLYAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
- SMHAbove-target inflation and a stated predominant focus on prices can keep the discount-rate backdrop restrictive for broad equities.
10 tracked in this asset class
| Symbol | Trend | Volatility | Vs trend | 1d | 5d | Weight |
|---|---|---|---|---|---|---|
| SPY US Large-Cap Index | Uptrend | Low | Near trend | -0.53% | +0.17% | 25% |
| QQQ US Technology Index | Uptrend | Normal | Near trend | -0.60% | +0.47% | 15% |
| RSP US Equal-Weight Index | Uptrend | Low | Near trend | -0.93% | -1.03% | 15% |
| IWM US Small-Cap Index | Uptrend | Normal | Near trend | -1.96% | -2.01% | 12% |
| DIA US Blue-Chip Index | Uptrend | Low | Near trend | -0.65% | -0.39% | 8% |
| SMH US Semiconductor Sector | Sideways | Elevated | Near trend | +0.64% | +1.80% | 5% |
| XLF US Financial Sector | Uptrend | Low | Near trend | -0.29% | +0.40% | 5% |
| XLI US Industrial Sector | Sideways | Normal | Oversold | -1.13% | -2.16% | 5% |
| XLV US Healthcare Sector | Uptrend | Normal | Near trend | -0.36% | -2.38% | 5% |
| XLY US Consumer Discretionary Sector | Sideways | Normal | Near trend | -0.53% | -1.45% | 5% |