Market Pulse · August 01, 2026 · Post-Market Edition

MACRO ENVIRONMENT

The macro environment is currently signaling a RISK-ON stance, buoyed by a robust Sahm Rule at 0.07, indicating no immediate recessionary concerns. The 10y-3m yield curve spread remains ‘Normal’ at 0.92, suggesting healthy short-term interest rate expectations, while the absence of 10y-2y data leaves a key recession indicator incomplete. Despite ‘Elevated’ CPI at 3.7%, the Fed funds rate is holding at a ‘Neutral’ 3.63%, implying current policy is not overtly restrictive. The ‘Extreme Fear’ reading from the Fear & Greed Index at 25 presents a contrarian buy signal, and the ‘Weak Dollar’ reflected in the DXY at 99.8 supports a risk-on appetite, further complemented by a ‘Healthy’ unemployment rate of 4.2%.

MARKET PHASE

US equities, as measured by the S&P 500, are exhibiting a ‘Weak BULL’ trend strength with an ADX of 17.1, and the index is trading above its 20-day moving average, indicating some underlying positive momentum despite a ‘SIDEWAYS’ overall US market phase assessment. In contrast, Bitcoin is in a ‘Weak BEAR’ trend phase with an ADX of 15.2 and is trading below its 20-day moving average, suggesting ongoing downward pressure in the crypto space. The VIX remains in ‘Normal’ territory at 15.99, down 6.4% today, implying a reduction in near-term expected volatility.

SECTOR TRENDS

Sector rotation is currently favoring a ‘Recovery’ theme, with Energy, Consumer Staples, and Consumer Discretionary leading the pack, driven by strong upward momentum in Energy. Conversely, Communication Services, Technology, and Utilities are experiencing significant weakness, showing the largest negative scores and indicating a defensive shift away from growth-oriented sectors. This divergence suggests that investors are currently prioritizing value and defensive plays over high-growth technology stocks, a positioning that warrants attention for portfolio adjustments and understanding the underlying drivers of market leadership.