Market Pulse · July 31, 2026 · Post-Market Edition

MACRO ENVIRONMENT

The current macro environment is signaling a RISK-ON stance, supported by a score of 30 and a ‘Safe’ reading from the Sahm Rule (0.07), indicating that recessionary pressures remain subdued. The yield curve spreads, both 10y-2y (0.45) and 10y-3m (0.86), remain normally sloped, a supportive signal for economic expansion and risk appetite. Despite elevated CPI year-over-year at 3.7%, the Fed funds rate at a ‘Neutral’ 3.63% suggests monetary policy is not overtly restrictive, while the ‘Healthy’ unemployment rate of 4.2% further bolsters confidence. The DXY trading at a ‘Neutral’ 100.0 and the Fear & Greed Index at ‘Balanced’ (28 · Fear) suggest a lack of extreme sentiment, allowing for cautious optimism.

MARKET PHASE

US equities, as represented by the S&P 500, are currently in a ‘BEAR’ phase with ‘Weak BEAR’ trend strength (ADX 17.3), trading below its 20-day moving average, suggesting downside momentum persists despite potential for intraday rebounds. Conversely, Bitcoin exhibits a contrasting ‘BULL’ phase with ‘Weak BULL’ trend strength (ADX 15.2), trading above its 20-day moving average, highlighting a divergence in risk asset sentiment. The VIX at 17.09 is classified as ‘Normal’, and its significant 17.3% decline today suggests a reduction in near-term volatility expectations, though this should be viewed cautiously given the underlying equity trend.

SECTOR TRENDS

Sector rotation is currently in a ‘Recovery’ phase, with Financials, Energy, and Industrials showing notable strength, indicating a shift towards value and cyclical sectors. Leading the pack are Energy (score 90, 1m ret 11.65%), Healthcare (score 75.0, 1m ret 2.49%), and Consumer Staples (score 65.2, 1m ret 2.61%), suggesting investor preference for defensive and commodity-linked assets. Lagging sectors include Technology (score -70.7, 1m ret -5.33%), Communication (score -75.8, 1m ret -2.88%), and Consumer Discretionary (score -79.7, 1m ret -4.83%), reflecting a cautious stance on growth-oriented and interest-rate sensitive areas. This divergence in sector performance warrants a portfolio allocation that favors resilient and economically sensitive industries over speculative growth names.