OVERVIEW
Markets took another step lower last week, with selling pressure showing up across most major equity benchmarks. The S&P 500 declined 1.90%, the Dow Jones Industrials fell 2.11%, and the NASDAQ dropped 2.07%. Large-cap stocks were hit as well, with the S&P 100 down 2.23% on the week. Year to date, the drawdown has deepened, with the S&P 500 now off 4.95% in 2026 and the NASDAQ lagging at -6.86%.
Beneath the surface, the gap between value and growth continues to stand out. The Russell 3000 fell 1.83% for the week. Growth stocks remained under the most pressure, declining 2.37% and now down 9.38% year to date. Value stocks were more resilient, slipping 1.29% on the week while still holding onto a 0.87% gain for the year. Mid- and small-cap stocks also moved lower, with the S&P 400 down 1.34% and the S&P 600 off 1.29%. Both indexes are now slightly negative on the year.
Overseas markets were also under pressure, though not uniformly. Developed markets (EAFE) declined 2.08% and are now down 1.80% year to date. Emerging markets held up relatively well, falling just 0.42% on the week and maintaining a 4.20% gain for 2026.
Fixed income provided some stability, though returns were mixed. Short-term Treasuries edged higher by 0.04% and are now up 0.73% year to date. Intermediate and long-term Treasuries declined 0.54% and 0.78%, respectively. Credit markets held up better, with investment-grade bonds down 0.27% and high yield bonds slipping 0.31%. Overall, most bond sectors remain modestly negative on the year, but declines have been limited compared to equities.
Real assets continue to tell a mixed story. Commodities slipped 0.62% on the week but remain up a strong 22.26% year to date. Oil continued its upward trend, gaining 1.28% and bringing its 2026 advance to 75.58%. MLPs were a bright spot, rising 1.39% and now up 15.68% for the year. Real estate lagged, falling 3.70% on the week and trimming its year-to-date gain to 0.29%. Gold saw a sharp pullback of 9.60% but remains up 6.19% this year.
Volatility eased slightly but is still elevated. The VIX declined 1.51% for the week and remains up 79.13% year to date. The U.S. dollar weakened modestly, falling 0.75% on the week, though it continues to hold a 2.40% gain for 2026.
KEY CONSIDERATIONS
Free Fallin’ – The stock market has been channeling its inner Tom Petty lately. It’s been “free fallin’” for more than a month now. As the chart below shows, the S&P 500 is trading below its 10-day, 20-day, 50-day, and, after last week, even its 200-day moving average.
This is what I’d call a trend break. Multiple measures of trend are starting to roll over at the same time.
That said, not every trend indicator has cracked just yet.
Take our Moving Average Slope indicator, for example. This uses the S&P 500’s 126-day moving average as a proxy for the market’s trend. It’s slower than some other examples, but when it rolls over, it tends to be a sign that something has seriously broken in the market.
As you can see, it has yet to roll over from all-time highs. The 126-day moving average (orange line) needs to fall 2.5 percentage points from the current peak before a negative trend signal is produced.
However, here’s another trend indicator that’s much closer to going negative. It’s called the Percentage Reversals indicator, and its signal is fairly simple. If the market falls 7.2% or more from a weekly high, a “sell” signal is generated.
That equates to a level of 6464 on the S&P 500, which is here on the chart:
So what could push these remaining trend measures lower?
Bond yields are a key pressure point. They’ve been moving higher, and that tends to tighten financial conditions and weigh on equities. One way to see this is through the 26-week change in Moody’s Baa corporate bond yields, which are medium-quality credits. That measure is now above zero and sits around 3.6%.
But even more concerning is if it rises above 6%. That’s when stocks have really struggled historically.
So, the bottom line is this. The trend has already weakened, and more signals are close to confirming it. Until we see improvement in either price action or interest rates, the weight of the evidence continues to lean toward a risk-off environment.
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.