Market Update 6/15/26

By Jerry Wagner

Market snapshot

•  Stocks: Stocks posted gains this past week. The S&P 500 Index rose 0.65%, the NASDAQ climbed 0.7%, and the Russell 2000 rallied 3.9%.

•  Bonds: Bonds also did well. The U.S. Aggregate Bond ETF (AGG) gained 0.6%, and the 20-year Treasury Bond ETF (TLT) added 0.8%.

•  Gold: Gold futures closed the week at $4,231.30, down $134 per ounce, or 3.07%. The U.S. Trade-Weighted Dollar fell 0.29%.

•  Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. The economic environment is classified as Normal, favoring gold and stocks from a return perspective. Volatility is High and Rising, a regime historically favorable for gold over other asset classes on a risk-adjusted-return basis.

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Stocks

The pause suggested in my last Market Update came to pass two weeks ago. But stocks managed to rally last Friday to finish the week on the positive side, inspired by the vaunted memorandum of understanding (MOU) on settling the Iranian conflict, along with excitement over the SpaceX IPO. Today (Monday, June 15), that rally continued.

As the previous chart makes clear, the S&P 500 Index fell to its 50-day moving average just before springing higher. The same occurred on the NASDAQ Composite’s weekly chart, where the 10-week moving average provided the support.

Geopolitical events have impacted stock prices throughout the year. First, the beginning of the Iran conflict sent stock prices reeling, only to have a cease-fire and repeated suggestions of an impending peace agreement lead the recovering equity indexes higher. Friday’s announcement of the MOU, followed by today’s setting of Friday as the signing date, has breathed fresh air into what was becoming a stale process.

Economic news has been mixed, with highlights (surging employment) and lowlights (increased inflation). Last week was more of the same.

Take inflation. The consumer price index for May was reported in line with higher expectations. But core inflation readings were below expectations, as the price of goods measured in the report actually declined instead of accelerating as expected.

Of course, with the peace agreement, the price of oil also fell. It is currently just below $80 per barrel after spending much of the second quarter over $100. Even before that, the price of gasoline here was below the $5-per-gallon high-water mark set in 2022.

The bottom line: Despite the unfavorable seasonality of mid-June, the combination of a stand-pat Federal Reserve meeting this week and a positive macro environment is likely to push the market higher to test its previous record highs in the short term.

Bonds

Bond yields remain stubbornly above their short-term moving average. Still, with the peace talks, yields have been falling for weeks and are about 25 basis points below their recent highs. Perhaps with the final signing of the MOU on Friday, we will get the downside breakout that would signal the beginning of a meaningful downtrend.

In the meantime, all eyes will be on the Federal Reserve on Wednesday as it meets to discuss the future direction of short-term rates. All indications are that, despite strong employment reports, the new Fed chairman has no appetite to raise rates at this meeting. The better-than-expected core inflation reports, as discussed above, and the peace deal give him some time and cover.

Government bonds have been rallying as yields have moved lower to test the moving average breakout point. Again, the long-term bond ETF (TLT) seems poised for a breakthrough. At the same time, the ETF representing the high-yield bond market (HYG) has broken to new highs, which is a good sign that the stock indexes may soon follow.

Gold

Gold attempted several breakouts above its moving average earlier this year, but it has since settled into an intermediate downturn and breached the lows set in March. The MOU announcement has caused the price of the yellow metal to reverse direction and rally, but further gains seem more dependent on resumed oil traffic in the Strait of Hormuz than anything else.

Still, the case for further gold appreciation remains strong. Last week, many commentators opined that gold was oversold. The latest reports indicate that central banks resumed buying the precious metal in April. Those followed previous reports that some central banks (Turkey, for example) had liquidated or lent gold to raise funds to combat high oil prices after the beginning of the Iranian conflict.

Longer-term price appreciation in the metal was in the headlines last week with the start of the World Cup. The trophy awarded to the winners is made of gold. As the following chart shows, its value has soared with gold’s price gains over the years.

Meanwhile, the U.S. dollar has tumbled along with the decline in interest rates. This has been relieving pressure on gold. The dollar also appears poised for a further breakdown if it falls below its recent support at the short-term moving average.

FPI is the subadviser to the only U.S. gold mutual fund, the Quantified Gold Futures Tracking Fund (QGLDX). Launched in 2013, the fund is designed to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.

The indicators

The short-term technical indicators of future stock market price changes that I watch are now mostly positive. And our QFC S&P Pattern Recognition strategy has 70% exposure to the S&P 500 Index as of Monday’s close.

Our QFC Political Seasonality Index strategy moved out of stocks at the close on June 5. It will return to stocks at the close on June 26. (Our QFC Political Seasonality Index—with all of the daily signals for 2026—is available after login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies remain mixed, with a positive bias. The Volatility Adjusted NASDAQ strategy has 20% net long exposure to the NASDAQ 100. Systematic Advantage ended the week 90% net long. Our QFC Self-Adjusting Trend Following strategy moved back to its 200% exposure mode at the close on June 12. QFC Dynamic Trends also moved from its defensive posture in the Quantified Eckhardt Managed Futures Strategy Fund (QECTX) back into the 2X exposure of the Quantified STF Fund (QSTFX). Investing for the longer term, Classic continues 100% long equities.

Because the QFC Dynamic Trends, Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-Adjusting Trend Following, and QFC S&P Pattern Recognition strategies can employ leverage, the investment positions may exceed 100%.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that markets are in a Normal economic environment stage (inflation and GDP are growing). Historically, a Normal environment has occurred 75% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Stocks have the highest rate of return in Normal periods. Gold has the second-highest return but has also experienced high drawdowns in these environments.

Our S&P volatility regime is registering a High and Rising reading. Since 2003, this environment favors stocks over gold and then bonds from an annualized return standpoint. Still, stocks have the highest drawdown risk among the three asset classes, making gold the best risk-adjusted performer in this particular regime. Bonds have the lowest return, risk, and drawdown. The High and Rising combination has occurred 28% of the time since 2003.