Market Update 8/24/26

By Daniel Poppe

Market snapshot

•  Stocks: The major U.S. stock market indexes fell last week. The NASDAQ Composite lost 2.02%, the Russell 2000 declined 1.61%, the S&P 500 decreased by 1.39%, and the Dow Jones Industrial Average fell 0.78%.

•  Bonds: The 10-year Treasury yield rose from 4.68% to 4.74% last week.

•  Gold: Spot gold rose 5.18% last week, closing above $4,600 an ounce.

•  Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is High and Rising, which favors stocks over gold and then bonds.

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For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

Despite last week’s decline, stocks remain near the highs set in August. AI enhancements remain the top focus, with semiconductor stocks posting strong gains in 2026 despite a recent pullback. Semiconductors are a key component of the hardware that powers AI infrastructure. That infrastructure has the potential to create large productivity gains across industries, possibly leading to higher profits throughout the economy.

Second-quarter earnings have indeed been strong. According to FactSet, the S&P 500’s blended year-over-year earnings growth rate is 50.4%. If that rate holds, it would be the highest rate of earnings growth since 2021. The S&P 500’s forward price-to-earnings ratio now sits above its five-year and 10-year averages.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below both its 50-day and 200-day moving averages.

Bonds remain in a downtrend. A resurgence in oil prices could be stoking inflation fears and causing investors to demand higher yields to lend money through bond purchases. Yields also remain elevated compared with levels at the start of the decade, and persistent inflation fears are an obstacle to those coming down.

The Federal Open Market Committee did not have a scheduled rate-setting meeting in August. Its next meeting is in mid-September. The committee took a more hawkish tilt at its last meeting in July. Market expectations for September are divided between the Fed holding rates steady and raising them, with CME FedWatch currently showing a decent chance of either outcome at the next meeting.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, The Quantified Gold Futures Tracking Fund. 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.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week with a 10% net long exposure to the S&P 500. Exposure changed to 40% net long on Monday, 110% net long on Tuesday, 180% net long on Wednesday, 110% net long on Thursday, and 150% net long on Friday.

Our QFC Political Seasonality Index strategy was aggressive at the start of the week and shifted to a defensive stance on Tuesday. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

The Volatility Adjusted NASDAQ strategy started the week with 120% net long exposure to the NASDAQ 100. Exposure changed to 100% net long on Monday, 140% net long on Wednesday, and 160% net long on Thursday.

The Systematic Advantage strategy held 120% net long exposure to the S&P 500 throughout the week.

Our QFC Self-Adjusting Trend Following strategy’s primary signal started the week with 200% net long exposure to the NASDAQ 100. Exposure changed to 0% net long on Monday.

The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-Adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may at times exceed 100%.

Our Classic model remained in stocks throughout last week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on platforms that are more restrictive and can take up to one month to generate a new signal.

FPI’s Growth and Inflation measure is one of our Market Regime Indicators. It shows that we are in a Normal economic environment stage (meaning a positive monthly change in prices and a positive monthly change in GDP). 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 drawdown in these environments.

Our S&P volatility regime is registering a High and Rising reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 28% of the time since 2003.