Market Pulse · August 24, 2026 · Post-Market Edition

MACRO ENVIRONMENT

The macro environment exhibits a RISK-ON stance, supported by a low Sahm Rule reading and normal yield curve spreads (10y-2y at 0.50 and 10y-3m at 0.86), suggesting minimal immediate recessionary fears. While CPI remains elevated at 3.5%, the Fed funds rate is holding at a neutral 3.63%, and unemployment is healthy at 4.1%, creating a relatively benign backdrop for risk assets. The Fear & Greed Index sits in ‘Greed’ territory (66), and the DXY’s weakness further underpins the current positive risk appetite.

MARKET PHASE

US equities, represented by the S&P 500, are in a ‘BULL’ trend, albeit with a weak trend strength (ADX 18.7), trading above its 20-day moving average, indicating upward momentum is present but lacks conviction. Cryptocurrencies, led by Bitcoin, show a more robust ‘BULL’ phase with strong trend strength (ADX 28.5) and a significant premium over its 20-day moving average, signaling greater conviction in this segment. The VIX is at a ‘Normal’ level of 15.13, down 5.5%, suggesting that near-term volatility expectations are subdued.

SECTOR TRENDS

A noticeable defensive rotation is underway, with Healthcare, Energy, and Materials currently leading the market, reflecting a preference for less cyclical sectors. This is evidenced by Healthcare (score 84.8), Energy (score 83.5), and Materials (score 78.9) posting strong one-month returns and high UQ AI Engine scores. Conversely, Financials, Industrials, and Utilities are lagging significantly, with Utilities showing particularly weak sentiment and performance, indicating a strategic shift away from economically sensitive and defensive plays, respectively, challenging the broad ‘RISK-ON’ macro signal.