OVERVIEW
Markets finished the week on weaker footing, with broad declines across most equity benchmarks. The S&P 500 fell 2.02%, the Dow Jones Industrials dropped 3.01%, and the NASDAQ declined 1.24%. Large-cap stocks were also under pressure, with the S&P 100 down 1.15% for the week. Year to date, returns remain mixed. The S&P 500 is now down 1.54% in 2026, while the NASDAQ has slipped further into negative territory at -3.68%.
Under the surface, the value versus growth divide remains a defining feature of the market this year. The Russell 3000 declined 2.15% for the week. Growth stocks held up relatively better, falling 0.85%, though they remain down 5.38% year to date. Value stocks dropped 3.44% last week but continue to lead in 2026 with a 3.65% gain. Mid- and small-cap stocks saw sharper pullbacks, with the S&P 400 falling 4.61% and the S&P 600 dropping 3.85%. Even after the setback, both indexes remain solidly positive for the year, up 3.18% and 3.56%, respectively.
International markets experienced one of the larger pullbacks of the week. Developed markets (EAFE) fell 6.78%, trimming their year-to-date gain to 2.47%. Emerging markets declined 6.89%, though they remain one of the stronger performers globally in 2026, still up 6.79% for the year.
Fixed income was mixed but generally steadier than equities. Short-term Treasuries gained 0.06%, while intermediate Treasuries slipped 0.95% and long-term Treasuries fell 2.21% for the week. Credit sectors held up somewhat better, with investment-grade bonds down 0.95% and high yield bonds declining 0.43%. Despite the recent volatility, most bond sectors remain modestly positive for the year.
Real assets continue to stand out in 2026. Commodities surged 8.06% last week and are now up nearly 20% year to date. Oil led the charge, jumping 32.73% on the week and pushing its year-to-date gain to an eye-catching 57.27%. MLPs also moved higher, rising 1.36% and extending their advance to 15.19% this year. Real estate pulled back 2.24% for the week but remains up 5.72% in 2026. Gold slipped 1.55% but continues to hold a strong year-to-date gain of 19.01%.
Meanwhile, volatility spiked sharply. The VIX surged 48.49% during the week and is now up more than 97% year to date, highlighting the growing turbulence beneath the surface of global markets. The U.S. dollar also strengthened, rising 1.44% for the week and 1.63% so far this year.
KEY CONSIDERATIONS
Delicate Markets – The stock market has felt a little uneasy lately. To be fair, prices at the broader index level have not completely collapsed, but beneath the surface there’s definitely been some turbulence. Several indicators we follow each week suggest that pressure is beginning to build, even if the major indexes have not fully reflected it yet.
One of the clearest signs came from our global stock/bond SHUT indicator. It turned negative last week. We highlighted this in prior commentaries as something worth watching. Sure enough, these defensive SHUT sectors have outperformed enough in recent weeks to cancel out the “buy” signal from last summer—and turn it into a “sell” signal for the broader stock market.
But with that said, we are also seeing some signs that the recent downside momentum in stock prices is losing steam. At the broad index level, our indicator below shows that the S&P 500 recently triggered a momentum reversal signal.
This indicator monitors the S&P 500’s 252-day (1 year) rate-of-change and compares it to its recent trading range to determine when momentum is ready to reverse. If you squint, you can see that the recent small downtick to start the year has now reversed.
Zoom out, though, and you will notice that the longer-term trend has mostly flattened out. From April 2025 to August 2025, the market’s momentum was clearly trending higher. Since then, however, we’re flat to even slightly negative.
So, from here, one could argue that it all comes down to participation. How many stock markets around the world are participating in the bull market? Where does global investor sentiment stand?
That brings us to our final indicator for the week. It looks at the percentage of global stock markets trading above their 50-day trends. This gives us a sense of how broadly the global rally is being supported. When most markets around the world are trending higher, it tends to reinforce strength in the major indexes.
As you can see, this participation measure has slipped into the middle of its historical range. If that reading were to fall further, particularly below the lower end of its typical range, it would suggest that weakness is spreading more broadly across global markets. That would likely make the current environment more difficult for stocks overall.
So where does that leave us today?
In short, the market appears to be entering a more delicate phase. The defensive shift signaled by the SHUT indicator tells us that some pressure is building under the surface. The momentum reversal suggests the trend may be cooling but not necessarily breaking. And global participation will be an important indicator to watch from here.
For now, the market is still standing. But the margin for error may be getting smaller.
This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation.
Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.
The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S. companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. The Russell 3000 Index is a capitalization-weighted stock market index that seeks to be a benchmark of the entire U.S. stock market. The S&P MidCap 400 is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment. S&P 600 Index measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable. The S&P 100 index is a capitalization-weighted index based on 100 highly capitalized stocks for which options are listed on the CBOE (Chicago Board of Exchange). The MSCI EAFE Index is an equity index which captures large and mid cap representation across 21 Developed Markets countries* around the world, excluding the US and Canada.
The Bloomberg U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. The Bloomberg U.S. Corporate High Yield Index is comprised of domestic and corporate bonds rated Ba and below with a minimum outstanding amount of $150 million. The Bloomberg U.S. Municipal Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and prerefunded bonds.