OVERVIEW
Markets surged higher last week, with strong gains across nearly every major equity benchmark. The S&P 500 climbed 4.54%, the Dow Jones Industrials rose 3.19%, and the NASDAQ led the way with a 6.84% rally. Large-cap stocks participated as well, with the S&P 100 gaining 4.99%. The rebound has pushed year-to-date returns back into positive territory for most major indexes, with the S&P 500 now up 4.10% and the NASDAQ ahead by 5.28% in 2026.
Under the surface, the leadership trends remain intact. The Russell 3000 gained 4.63% for the week. Growth stocks bounced sharply, rising 6.81%, but continue to trail on the year with a 1.29% gain. Value stocks also moved higher, up 2.47% on the week, and still lead comfortably with an 8.76% year-to-date return. Mid- and small-cap stocks continue to stand out, with the S&P 400 up 3.51% and the S&P 600 rising 4.04%. Both remain among the strongest performers this year, up 10.32% and 12.29%, respectively, reinforcing the broader rotation away from large-cap dominance.
International markets also turned in solid results. Developed markets (EAFE) gained 2.15% and are now up 7.56% on the year. Emerging markets rose 3.21% and continue to lead globally, with a 13.73% gain in 2026.
Fixed income was modestly positive across the board. Short-term Treasuries edged up 0.08%, while intermediate and long-term Treasuries gained 0.48% and 0.65%, respectively. Credit markets were steady, with investment-grade bonds rising 0.67% and high yield bonds up 0.66%. Most bond sectors remain positive on the year, continuing to provide a stabilizing role alongside equities.
Real assets delivered mixed results. Real estate advanced 3.98% and is now up 10.43% year to date. MLPs pulled back 2.63% on the week but still hold an 11.89% gain for the year. Commodities slipped 0.50%, though they remain one of the strongest areas overall, up 19.87% in 2026. Oil was the biggest drag, falling 7.03% for the week, but it is still up an eye-catching 67.78% year to date. Gold added 1.93% and continues to trend higher, now up 12.40% on the year, while corn gained 2.31% and remains modestly positive.
Volatility eased again, with the VIX dropping 9.10% on the week, though it remains elevated with a 16.92% gain year to date. The U.S. dollar declined 0.29% but is still slightly positive on the year.
Overall, last week’s rally added to the improving tone in the market. Participation continues to broaden beyond large-cap growth, with strength in mid caps, small caps, and international equities. Real assets remain a key source of leadership, even with some short-term pullbacks. At the same time, volatility is still elevated and commodity swings remain sharp, which suggests this is still an environment that requires a steady hand rather than full conviction.
KEY CONSIDERATIONS
Mo Better – If you read our commentary from a few weeks ago, you might remember a piece we called “Mo Problems.” At the time, an indicator we track called the Big Mo Multi-Cap Tape Composite had fallen below a historically meaningful threshold—a level that has historically been associated with negative returns for stocks. Things, in short, were not looking great.
Well, a lot can change in a few weeks. And in this case, it’s changed for the better.
The market’s recovery since then—sparked in large part by the U.S.-Iran ceasefire we discussed last week—has had a meaningful effect on our indicators. One of the most encouraging developments has been the recovery in market momentum. The Momentum Composite in our model, which had moved to a Sell signal in late March, has since flipped back to a Buy. And it’s not just the signal that improved—the reading itself has moved sharply higher.
One measure worth highlighting here is something called the Value Line Geometric Average 26-Week Rate of Change. It sounds technical, but the concept is fairly simple: it measures how the “average” stock—not just the big household names at the top of the market—has performed over the past six months. When this number is positive and rising, it tells you that the broader market is gaining momentum, not just a handful of mega-cap companies doing the heavy lifting.
As shown above, that measure just turned positive and moved to a Buy signal earlier this week. That’s an encouraging sign that the recovery is starting to broaden out.
Another area showing meaningful improvement is credit spreads. You might recall that we flagged widening credit spreads as a concern back in mid-March. To put it in plain terms, credit spreads measure the extra yield that riskier bonds have to pay compared to safe U.S. Treasuries. When spreads widen, it’s a sign that investors are growing nervous about the health of the economy and credit markets. When they tighten back in, it signals that confidence is returning.
After several weeks of concern, the Credit Spreads Composite in our model has now moved back to a Buy signal. As shown below, that’s a welcome sign that financial conditions haven’t tightened to the point of causing serious stress—one less thing to worry about.
Now, it would be easy to get carried away here. Not everything is pointing in the same direction. Valuations remain stretched, and our valuation indicators have been on Sell signals for well over a year now. That hasn’t changed. Interest rates also remain a headwind. These aren’t signals to dismiss, and they act as a kind of ceiling on our enthusiasm.
But taken together, the picture is genuinely improving. Momentum is recovering. Credit conditions are stabilizing. The trend—both in the U.S. and globally—remains intact. And on a contrarian basis, investors are still positioned fairly defensively, meaning there’s still plenty of potential buying power sitting on the sidelines.
The bottom line? The data are getting “Mo Better.” Not perfect—but better. After a rough stretch in March, the weight of the evidence has shifted back toward the constructive side. We’re leaning cautiously optimistic, and we’ll continue to let the indicators guide the next move.
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.