Market Update 9/28/26

By Will Hubbard

Market snapshot

•  Equities: Major U.S. stock indexes were mostly higher last week. The S&P 500 Index rose 1.23%, the NASDAQ Composite gained 2.07%, the Dow Jones Industrial Average added 0.28%, and the small-cap Russell 2000 Index fell 0.79%.

•  Fixed income: The 10-year Treasury yield rose from 5.00% to 5.16% last week.

•  Gold and commodities: Gold fell 2.14% for the week.

•  Market indicators and outlook: FPI’s Market Regime Indicators continue to show a Normal economic environment, which historically favors stocks over bonds and then gold. Volatility is Low and Falling, which historically 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.

Equities

Last week’s gains came from the top of the market rather than from across it. The NASDAQ 100 Index, which tracks 100 of the largest nonfinancial companies listed on the exchange, rose 3.26%, more than a percentage point ahead of the broader NASDAQ Composite. Six of the 11 S&P 500 sectors rose last week, led by Information Technology, which gained 3.13%. The Dow, a price-weighted average that gives more sway to higher-priced shares than to larger companies, trailed well behind the tech-heavy benchmarks. The small-cap Russell 2000 slipped while the large-cap indexes gained. That divergence points to relatively narrow market leadership. When a small group of large companies drives index gains, headline returns can look stronger than the performance experienced across the broader market.

The broader trend remains intact. The SPDR S&P 500 ETF closed Friday at 771.35, above both its 50-day moving average (761.57) and its 200-day moving average (718.45), commonly used measures of short- and longer-term trends.

Fixed income

Treasurys offered little shelter to investors last week. The 10-year yield climbed 16 basis points. Because bond prices generally move in the opposite direction of yields, the increase put pressure on intermediate- and long-term Treasury prices.

The long end of the curve took the bigger hit, consistent with its greater sensitivity to interest-rate changes. The iShares 20+ Year Treasury Bond ETF (TLT) closed Friday at 79.32, below both its 50-day and 200-day moving averages. The iShares 7-10 Year Treasury Bond ETF (IEF) closed at 90.00, also below both its averages, but its gap to the 200-day moving average was narrower.

The question now is whether rising government borrowing costs spill into credit. Bespoke Investment Group noted in its August 21 report that the climb in long-term yields had been orderly, had not created major financial-stability concerns, and had not hurt corporate issuance.

Bespoke’s August 27 indicator table showed a mixed picture beneath the surface, though. Investment-grade corporate spreads, the extra yield those bonds pay over Treasurys, widened over both the 10-day and 50-day windows, while high-yield spreads narrowed. Higher Treasury yields now meet that backdrop, which makes the safer end of the corporate market the place to watch for early signs of strain.

Gold and commodities

A firmer U.S. dollar was the clearest headwind for gold last week. The U.S. Dollar Index rose 0.75%, while COMEX gold futures fell 2.34%. Gold is priced in dollars, so a stronger greenback can make bullion more expensive for buyers holding other currencies and tends to cool demand.

The technical backdrop also remained weak. SPDR Gold Shares (GLD), an exchange-traded fund that holds gold bullion, closed Friday at 393.41, below its 50-day moving average of 395.43 and its 200-day average of 416.44. The 50-day average also remained below the 200-day, signaling continued weakness in gold’s shorter-term trend.

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. Last week, QGLDX fell 2.16%.

The indicators

The QFC S&P Pattern Recognition strategy started the week 200% net long to the S&P 500 Index. Exposure fell to 90% net long on Monday and 60% net long on Tuesday before moving to cash on Wednesday. The strategy returned to 60% net long on Thursday and ended the week 100% net long.

The QFC Political Seasonality Index strategy remained risk-off throughout the week. The 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.

Our intermediate-term tactical strategies remained varied in their degree of defensive positioning. The key advantage these strategies offer investors is their ability to adapt to changing market environments by participating during uptrends and moving to a defensive posture during downtrends.

The Volatility Adjusted NASDAQ strategy began the week 120% net long to the NASDAQ 100 Index, reduced exposure to 60% net long on Tuesday, held that level through Thursday, and ended the week 80% net long. The Systematic Advantage strategy remained 120% net long the S&P 500 Index throughout the week, while the QFC Self-adjusting Trend Following strategy stayed in cash. These strategies can employ leverage, so their exposure may exceed 100% at times.

The Classic strategy maintained its risk-on posture throughout the week. Most Classic accounts follow a signal that can change exposure within a week, though a few remain on platforms requiring up to a month to adjust to new signals.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows a Normal economic environment, meaning both prices and GDP are rising on a monthly basis. Historically, a Normal environment has occurred 75% of the time since 2003 and has been positive 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 Low and Falling reading, which historically has favored stocks, followed by gold and bonds, based on annualized returns. This combination has occurred 32% of the time since 2003.