Stock Market Outlook: March 8th = Downtrend

The stock market outlook remains in a downtrend, as markets reprice the impact of international conflict.

Oil and Energy outperformed; Emerging Markets, Industrials, and Value Styles underperformed.  Volatility ramped across asset classes and NFP data surprised to the downside.

TREND ANALYSIS

The S&P500 ( $SPX ) dropped 2% last week:

• ~2.5% below the 50-day moving average
• ~2.5% above the 200-day moving average

All 3 technical indicators continue to highlight price weakness:

• Average Directional Index: Bearish
  • The base ADX number is on the rise, signaling a strengthening trend
• Institutional Activity: Bearish
  • Price fell further below the 50-day moving average
• On-Balance Volume: Bearish
  • Remains below the long-term average

SPX Price & Volume Chart – 2026-03-08

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) rocketed higher last week, gaining ~33%.  Yes, you read that right…not a typo.  Emerging Market Equities ( $EEM ) led to the downside, losing more than 8%.  Emerging Market Equities and Bonds ( $EEM, $PCY ) moved to bearish bias, Development Market Equities ( $VEA ) to Neutral, and the U.S. dollar ( $DXY ) to bullish.

Asset Class Performance – 2026-03-08

S&P500 Sectors

Energy ( $XLE ) was the lone gainer; Industrials ( $XLI ) led to the downside.  Healthcare ( $XLV ) moved to bearish, Industrials to neutral.

S&P Sector Performance – 2026-03-08

S&P500 Investing Styles

Investors fled all style factors last week.  Large Cap Growth outperformed by falling less than 1%.  Mid Cap Growth ( $IJH ) fell the most, although it had plenty of company ( $IWO, $IJJ, $MTUM ).

High Beta, Small Cap Growth & Value, Mid-Cap Growth & Value,  Momentum , Quality, and Defensives ( $SPHB, $IWO, $IWN, $IJH, $IJJ, $MTUM, $QUAL, $POWA ) all dropped to bearish bias.  Large Cap Value moved to neutral.

Sector Style Performance – 2026-03-08

COMMENTARY

Markets

The S&P500’s Volatility Index ( $VIX ) ramped higher last week, hitting 29.9 on Friday.  Equities are essentially “uninvestable” when the reading is above 29; that level signals a high probability of large price swings…particularly the negative kind.  Both the Nasdaq and Russell 2000 volatility readings ended the week above 30 as well.

When equity markets enter a sell off or a downtrend with accelerating volatility, the entire asset class gets impacted.  Small Caps & Large Caps, Growth & Value, Technology & Consumer Staples, Emerging & Developed Markets; they’re all just different flavors of equities.  So it’s no surprise that we encountered a broad sell-off last week, negatively impacting all sectors and styles.  Energy was the only “winner”, but even that performance required a +30% rally in Oil.

Speaking of oil; what a move!  Up ~13% on Friday alone.  The commodity also experience a massive move in volatility, reaching levels on par with the COVID crisis, as price responded to news out of West Asia ( more below ).

Treasury yields also rallied off of lows last week, sending bond funds lower.

Given the broad rise in volatility, it’s reasonable to expect large price moves to the downside next week.  Many institutional trading methodologies mechanically adjust holdings at pre-defined volatility levels.  The speed of the moves will boil down to urgency; can positions be shopped around in an orderly fashion, or do they have to be liquidated immediately ( e.g. margin call ).

For individual investors, it’s still the game of minimizing holdings with bearish bias ( capital preservation ) and managing positions ( trimming at overbought, adding at oversold ) that are bullish.

Macroeconomic Data & Policy

Manufacturing and Services PMI surveys showed increased activity year over year, but also showed a high level of ongoing pricing pressure.

On Wednesday, ADP employment data showed 63k jobs were added in February 2026.  On Friday, Non-Farm Payrolls showed a loss of 92k jobs during the same period, well below expectations for a gain of 59k.

Retail Sales decreased for the month of January, but beat expectations and were actually higher year over year.

Geopolitics

Hostilities in Western Asia continue to roil global markets, particularly oil and gas.    Threats to ships traversing the Strait of Hormuz led several nations ( UAE, Iraq, Kuwait ) to reduce their oil production after running out of storage space.  Saudi Arabia and Qatar halted refinery activity after experiencing drone attacks.

EYES ON THE HORIZON

The latest inflation data ( CPI & PCE ) hits the wires this week, along with the second Q4 GDP update and another jobs report.

• Monday: —
• Tuesday: —
• Wednesday: CPI
• Thursday: —
• Friday: PCE, Q4 GDP ( 2nd Revision ), JOLTS

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: March 1st =Downtrend

The stock market outlook remains in a downtrend, with geopolitical risks primed to inject volatility into financial assets.

Gold, Utilities, and Low Beta outperformed; Crypto, Financials, and Value underperformed.  Producer prices came in higher than expected, which will sharpen the focus on this week’s employment data.

TREND ANALYSIS

The S&P500 ( $SPX ) slipped 0.4% last week, ending the back where it started:

• At the 50-day moving average
• ~5% above the 200-day moving average

The index tried to retake the 50-day moving average, but gave back the gains immediately, created another lower-high.  All 3 technical indicators are now bearish:

• Average Directional Index: Bearish
  • No change; remains bearish
• Institutional Activity: Bearish
  • Price couldn’t hold the 50-day moving average
  • 2 more distribution days brings the total to 7
• On-Balance Volume: Bearish
  • Moved to bearish after falling below the average on a lower low

SPX Price & Volume Chart – 2026-03-01

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Utilities ( $XLU ) continue to outperform, gaining 3% last week and heading all comers by a wide margin.  Financials ( $XLF ) underperformed.  Communications ( $XLC ) rallied to back to bullish.

S&P Sector Performance – 2026-03-01

S&P500 Investing Styles

Low Beta ( $SPLV ) led styles higher; Small and Midcap Value ( $IWN, $IJJ ) lagged, giving back some of their recent gains.  Momentum ( $MTUM ) fell back to neutral bias.

Sector Style Performance – 2026-03-01

Asset Classes

Gold ( $GLD ) was the best asset class last week, and is up more than 50% since turning bullish.  Bitcoin ( $IBIT ) underperformed.

Asset Class Performance – 2026-03-01

COMMENTARY

Markets

Trading and investing in equities has been a slog so far this year. You’ve seen tickers slide back and forth between bullish and bearish bias, strong earnings met with big sells offs ( **cough** Nvidia **cough** ), and overnight gaps on after-hour headlines.

The Volatility Index ( $VIX ) spent almost the entire month of February on the cusp of the “chop zone”, confirming the difficult environment we’ve experienced.

Using a mechanical system, such as the example we use for the stock market outlook, can be frustrating when markets exhibit these characteristics.  That’s one reason it’s important to diversify into other asset classes.  It’s rare that they all move sideways at the same time, so there’s always another trade, like recent trends in gold and non-US equities.

Macroeconomic Data & Policy

Producer Prices ( PPI ) surprised to the upside: headline rose 1% year over year ( y/y ), while Core increased 2.4% y/y. Not exactly a welcome sign for those expecting rate cuts.

Regarding employment trends, one of the bigger stories was Block, Inc. ( $XYZ ) announcing a strategic shift toward artificial-intelligence-focused operating model.  While most pundits expect AI to replace entry-level, white-collar positions, Block’s change came with a workforce reduction of almost 50%!  And this is for a company doing well financially.  Not exactly good news for the next employment cycle.

Geopolitics

Negotiations between U.S. and Iranian representatives stalled out during the week, resulting in military strikes during the weekend.  Equity markets are likely to open down ( Sunday night futures ), with a massive volatility spike when New York trading opens on Monday.  Oil and Gold are expected to open higher.

EYES ON THE HORIZON

The latest unemployment and jobs data hits the wires this week, along with ISM surveys.  While these data points are likely to short-term, knee-jerk reactions, geopolitical headlines are now the dominant driver.

• Monday: ISM Manufacturing PMI
• Tuesday: —
• Wednesday: ADP Employment & ISM Services PMI
• Thursday: Unemployment Claims
• Friday: NFP & Retail Sales

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: February 22th = Downtrend

The stock market outlook remains in a downtrend, though price has risen back to retest key levels.

Oil, Materials & Utilities, and High Beta outperformed; Consumer Staples lagged.  PCE was higher than expected, while Q4 GDP came in low due to the government shutdown.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 1.1% last week, as price traded back to key levels:

• At the 50-day moving average
• ~6% above the 200-day moving average

The index bounced after sweeping the lows near 6800, but was unable to clear the 21 and 50 day moving averages with any conviction.

• Average Directional Index: Bearish
  • ADX direction indicators remain bearish
• Institutional Activity: Bearish
  • Price returned to the 50 dma on average volume
• On-Balance Volume: Neutral
  • On-balance volume is retesting its long-term average

SPX Price & Volume Chart – 2026-02-22

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Materials ( $XLB ) outperformed, closely following by Utilities ( $XLU ).  Consumer Staples ( $XLP ) underperformed.  Communications ( $XLC ) clawed its way back to neutral.

S&P Sector Performance – 2026-02-22

S&P500 Investing Styles

All investing styles ended the week in positive territory.  High Beta ( $SPHB ) led the way and Mega Cap Growth, High Dividend, and Defensives ( $OWF, $SPHD, $POWA ) brought up the rear.  Momentum ( $MTUM ) reclaimed a bullish bias.

Sector Style Performance – 2026-02-22

Asset Classes

All asset classes gained ground last week, with Oil ( $USO ) gaining almost 6% and U.S. Bonds adding 0.1%.  The U.S. Dollar ( $DXY ) strengthened to neutral bias after several weeks in bearish territory.

Sector Style Performance – 2026-02-22

COMMENTARY

Markets

Selling pressure took a breather last week; almost the entire dashboard registering a gain.  Defensive positioning remains in control, although Consumer staples experienced some profit taking.

The Volatility Index ( $VIX ) spent another week testing the “chop zone” (a reading from 20 to 30), supporting the risk-off signals provided by price and volume.

Macroeconomic Data & Policy

New orders for durable goods fell 1.4% in January, which was a bit less than expected.

Headline PCE Price Index rose 2.9% YoY, up from 2.8% in November and driven by the cost of services. Core PCE rose 3.0% YoY, versus 2.8% in November.

Real GDP grew 1.4% in Q4 2025, a sharp slowdown from 4.4% in Q3 and lower than 1.9% in 2024 Q4. Government spending contracted ~5% due to the fall 2025 shutdown, bringing down the overall figure by almost 1%.

FOMC minutes showed a hawkish pause in place,, with most members wanting to hold rates steady until inflation shows further improvement.

The Supreme Court ruled 6–3 that President Trump’s tariff program exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA).  Within hours of the ruling, the Trump administration announced a new, 10% global tariff, citing authority under the Trade Act of 1974 instead of the IEEPA.

Geopolitics

The U.S. continues to build up military assets in the Middle East. Earlier in the week, there was some hope for an agreement as talks in Geneva resulted in some “guiding principles”. But the two sides remain far apart, per sources (Reuters.com: US and Iran slide towards conflict as military build-up eclipses talks).

EYES ON THE HORIZON

Several Fed members speak next week; PPI comes out Friday

• Monday: —
• Tuesday: 7 Fed Speeches
• Wednesday: —
• Thursday: —
• Friday: PPI

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: February 15th = Downtrend

The stock market outlook remains in a downtrend after institutional selling sent price below key levels again.

Non-U.S. Developed Markets, Utilities, and and High Dividends outperformed; Bitcoin, Financials, and Mega-Cap Growth lagged.  Non-farm payrolls were stronger than expected and inflation eased slightly.

TREND ANALYSIS

The S&P500 ( $SPX ) fell 1.4% last week, as price traded to and through key levels:

• ~1% below the 50-day moving average
• ~5% above the 200-day moving average

The index experience another volatile week, but failed to make a higher high.  And then the technical indicators fell further into bearish territory.

• Average Directional Index: Bearish
  • • ADX direction indicators remain bearish
    • The overall trend is still extremely weak
• Institutional Activity: Bearish
  • Price broke below the 50 dma on elevated trading volume again
  • 2 distribution days brings the total to 6
• On-Balance Volume: Bearish
  • On-balance volume moved to bearish after closing below a long-term average

SPX Price & Volume Chart – 2026-02-15

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Utilities ( $XLU ) outperformed by a wide margin, while Financials ( $XLF ) underperformed.  Communications and Financials ( $XLC, $XLF ) dropped to bearish bias, and Utilities ( $XLU ) ramped to bullish.

S&P Sector Performance – 2026-02-15

S&P500 Investing Styles

High Dividend stocks ( $SPHD ) led upside, and Mega Cap Growth ( $OWF ) headed the downside and fell back to bearish bias.  Momentum ( $MTUM ) slipped to neutral.

Sector Style Performance – 2026-02-15

Asset Classes

Non-U.S. Developed Markets ( $VEA ) led asset class returns to the upside, while Bitcoin ( $IBIT ) led to the downside.  DM bonds ( $BNDX ) strengthened again, moving up to bullish bias.  U.S. equities ( $SPY ) moved to bearish.

Asset Class Performance – 2026-02-15

COMMENTARY

Markets

U.S. equity sectors show the defensive posture of capital flows: strong performance in Industrials, Materials, Energy, Healthcare, and Staples.  The breakout in Utilities, along with the move in Real Estate, benefited from a sharp drop in U.S. Treasuries.

The Volatility Index ( $VIX ) spent the week on the doorstep of Hedgeye’s “chop zone” (a reading from 20 to 30), supporting the general risk-off signals provided by price and volume.

Macroeconomic Data & Policy

Non-Farm Payrolls showed the U.S. added 130,000 jobs in January; above expectations for 70,000 and the Decembers increased of 48,000.

Existing home sales fell 4.4% YoY; the sharpest drop in ~4 years.

January headline CPI slowed from 2.7% to 2.4%; Core figures eased from 2.6% to 2.5%. Energy prices fell slightly, driven by a drop in gasoline prices.

Geopolitics

A quiet week, with no major geopolitical events influencing markets action.

EYES ON THE HORIZON

U.S. Markets are closed Monday for the Presidents Day Holiday.  Chinese markets will be closed for an entire week (Monday, Feb 16 through Monday, Feb 23) for Lunar New Year Celebrations.

• Monday: U.S. Markets Closed
• Tuesday: n/a
• Wednesday: Housing Starts, Durable Goods, FOMC Minutes
• Thursday: n/a
• Friday: PCE

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: February 8th = Downtrend

The stock market outlook shifted to a downtrend on Thursday, but may bullish biases remain intact.  A continuation from Friday’s reversal will make the change short lived.

Gold, Consumer Staples, and Mid-Cap Value outperformed; Oil/bitcoin, Communications, and Large-Cap growth lagged. Macro data was mixed, and non-farm payroll data was delayed until this week, joining retail sales, and CPI.

TREND ANALYSIS

The S&P500 ( $SPX ) fell 0.1% last week, as price traded to and through key levels:

• ~1% above the 50-day moving average
• ~7% above the 200-day moving average

Last week’s volatility whipped around the technical indicators; 2 of 3 were bearish as of Thursday’s close, moving the outlook to a downtrend.  Institutional activity recovered Friday; one more signal change is needed.

• Average Directional Index: Bearish
  • ADX direction indicators remained bearish all week
• Institutional Activity: Bullish
  • Price broke the 50 dma on elevated trading volume Thursday, moving the signal to bearish and shifting the outlook.
  • Price recovered bullishly Friday morning, flipping the indicator back to bullish.
• On-Balance Volume: Neutral
  • On-balance volume moved to neutral on Tuesday, testing it’s trendline for the first time since August

SPX Price & Volume Chart – 2026-02-08

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Consumer Staples ( $XLP ) outperformed, though several sectors kept pace.  Communications ( $XLC ) underperformed.  Consumer Discretionary and Technology ( $XLY, $XLK ) fell to bearish bias.  Communications and Utilities ( $XLC, $XLU ) moved to neutral, and Financials ( $XLF ) moved back up to bullish.

S&P Sector Performance – 2026-02-08

S&P500 Investing Styles

Mid-cap growth ( $IJH ) led upside performance, and Large Cap Growth ( $IWF ) was the worst style. Last week’s bias changes reversed:  Mega Cap Growth ( $OEF ) returned to neutral bias, and Defensives ( $POWA ) to bullish.

Sector Style Performance – 2026-02-08

Asset Classes

Gold ( $GLD ) led asset class returns. Oil reversed course from last week’s gains, but Bitcoin ( $IBIT ) was the biggest loser again.  DM bonds ( $BNDX ) moved up to neutral bias, and EM bonds ( $PCY ) retreated to neutral.

Asset Class Performance – 2026-02-08

COMMENTARY

Markets

Institutions were selling, but selectively.  Index prices fell below key levels, then recovered.  The S&P500 trend indicators flipped to bearish, but the $SPY bias is back to bullish.  Some names broke out, some broke down.  Talk about mixed messages.

• Traders sold large cap growth ( $IWF ) and technology stocks ( $XLC, $XLY, $XLK ).
• Traders bought Staples, Energy, Industrials, Materials ( $XLP, $XLE, $XLI, $XLB ) and value stocks ( $IWN, $IJJ, $IWX ).

Tech companies are the largest weights in general indexes, like the S&P500 and the Nasdaq 100, so their capital flows have an oversized impact on index price movement.  Check out the equal weight version of the S&P500 ( $RSP ): price broke out to new highs on Friday!

$RSP Price & Volume Chart – 2026-02-08

I’d say the market is mixed, the goal of these weekly exercises is preserving capital and reducing losses, so erring on the side of caution is the correct course of action.  There is always another trade, but you have to have capital to participate.

Macroeconomic Data & Policy

January ISM Manufacturing PMI improved to 52.6%, representing the first expansion in 12 months. ISM Services PMI remained steady at 53.8%.

Job openings (JOLTs) fell year over year, signaling softer labor demand.  And consumer sentiment was better than expected, but well below last year’s levels.

Non-farm payrolls were delayed a week due to the government shutdown.

Geopolitics

According to a U.S. trade representative, the U.S. is developing plans with Mexico, the European Union and Japan to implement minimum prices for critical, rare-earth minerals, triggering a sell-off in the sector.

The partial U.S. government shutdown ended last week.

EYES ON THE HORIZON

This week brings several important data releases:

• Monday: —
• Tuesday: Retail Sales
• Wednesday: Rescheduled NFP
• Thursday: Existing Home Sales
• Friday: CPI

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook: February 1st = Uptrend

The stock market outlook continues to show an uptrend in place for the S&P500, indicated by bullish designations for 2 of 3 technical indicators.

Oil, Energy, and High Dividend payers outperformed, metals / crypto crashed, reaction to earnings was mixed, and the FOMC held rates steady.  A partial government shutdown, ISM survey results and jobs data will shape the week ahead.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 0.3% last week, continuing to trade above key levels:

• ~1% above the 50-day moving average
• ~8% above the 200-day moving average

Despite the volatile price action, indicators start the week unchanged:

• Average Directional Index: Bearish
  • ADX direction indicators flipped to bearish during the week, but reversed on Thursday
• Institutional Activity: Bullish
  • Selling volume increased last week, but only triggered one distribution day and price remains above the 50 dma, keeping a bullish trend in place
• On-Balance Volume: Bullish
  • On-balance volume remains above its trendline

SPX Price & Volume Chart for 2026-02-01

PERFORMANCE HIGHLIGHTS & COMPARISONS

S&P500 Sectors

Energy ( $XLE ) outperformed for the second consecutive week; Healthcare ( $XLV ) underperformed.  Technology ( $XLK ) eased back to neutral after a slew of Mag  7 earnings, while Financials ( $XLF ) regained neutral bias.

S&P Sector Performance – 2026-02-01

S&P500 Investing Styles

High Dividend ( $SPHD ) led upside performance, which hasn’t happened in a long time.  But it was Small Cap Growth falling 3% that really stood out within sector styles.  Mega Cap Growth ( $OEF ) returned to bullish bias, and Defensives ( $POWA ) hit neutral.

Sector Style Performance – 2026-02-01

Asset Classes

The moves in metals continue to dominate global headlines.  Oil ( $USO ) quietly led asset classes higher last week, gaining almost 8%.  Bitcoin ( $IBIT ) was the biggest loser, as the leverage continues to be unwound across the cryptocurrency space.  U.S. Bonds ( $IEF ) moved up to neutral bias, and EM bonds ( $PCY ) improved to bullish.

Asset Class Performance vs. U.S. Dollar – 2026-02-01

COMMENTARY

Markets

The metals rally we discussed last weekend reversed violently on Thursday:  Silver futures collapsed from a high of $121.79 to a low of $74! That’s a 39% peak‑to‑trough unwind in less than 2 days. Platinum’s overall move was similar, but took a few more sessions.

Macroeconomic Data & Policy

Mega‑cap tech delivered generally good headline numbers, but weaker than expected guidance and/or margin compression caused a few names to sell off.

December PPI rose 3.0% year-on-year, unchanged from November but higher than expectations for 2.7%.  Increases in services prices drove the surprise upside.

The FOMC held rates steady and emphasized a data‑dependent path forward. On Friday, President Trump announced Kevin Warsh as his nominee to replace Powell as head of the Federal Reserve.  A lot of ink was spilled on what Mr. Warsh has said in the past, regarding Fed policy.  What he will do if/once he’s confirmed as Chairman is another matter.  The current expectation is a mix:  hawkish on the balance sheet ( reducing liquidity ) and dovish on interest rates ( potential cuts ).

Geopolitics

A partial U.S. government shutdown began over the weekend; a funding package passed the Senate late Friday, but still needs approval from the House of Representatives on Monday.

EYES ON THE HORIZON

This week brings several important data releases:

• Monday: ISM Manufacturing PMI
• Tuesday: December JOLTs Job Openings
• Wednesday: ISM Services PMI
• Thursday: —
• Friday: Non Farm Payrolls & Michigan Consumer Sentiment

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Content Sources:
Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com,
TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.

Performance Methodology:
All sector performance data is sourced from ThinkorSwim and reflects price‑only returns
calculated using end‑of‑week closing data. Bias classifications follow a proprietary
Invest Safely, LLC model and update only when trend conditions meet predefined thresholds.
All calculations are consistent across every chart on this page.

Disclaimer:
Invest Safely, LLC is an independent investment research and online financial media company.
Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to
our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of January 25th = Uptrend

• Average Directional Index: Bearish
• Institutional Activity: Bullish
• On-Balance Volume: Bullish

ANALYSIS
The stock market outlook continues to show an uptrend in place for the S&P500.

The S&P500 ( $SPX ) lost 0.4% last week.  The index sits ~1% above the 50-day moving average and ~8% above the 200-day moving average.

Price briefly dipped below the 50-day when the market opened on Tuesday (and a neutral bias), but rebounded the following day.  The sharp move flipped ADX directional indicators, but wasn’t accompanied by a wave of institutional selling, so the other signals remain bullish.

SPX Price & Volume Chart for Jan 25 2026

PERFORMANCE COMPARISONS
Energy ( $XLE ) outperformed and Utilities ( $XLU ) underperformed last week.    Communications ( $XLC ) regained bullish bias, while Financials ( $XLF ) dropped to bearish bias.

Energy and Industrials benefited from the rotation out of Technology and Mag-7 names, with Consumer Staples not far behind.  Healthcare, one of the strongest sectors coming into 2026, consolidated during the past month.

S&P Sector Performance from Week 05 of 2026

Small Cap Value ( $IWN ) led all performers for the third consecutive week, but the overall return return was barely break-even.  High Beta ( $SPHB ) was the worst sector style.  There were no changes in bias.

Despite the weak price action, Small and Mid-caps continue to outperform ( Value & Growth ), again highlighting a rotation out of Large and Mega Cap tech, rather than outright selling of equities.

Sector Style Performance from Week 05 of 2026

Gold ( $GLD ) surged higher last week, leaving other asset classes in the dust. Bitcoin ( $IBIT ) was the worst performer, giving back it’s recent gains and falling to bearish bias…as did the U.S. Dollar ($DXY ).

Asset Class Performance from Week 05 2026

COMMENTARY
For 2026, we’ve updated the asset comparison table:  equities and bonds for Development Markets ( “DM” ) and Emerging Markets ( “EM” ).  The additions won’t overtake volatile assets like bitcoin, or more recently precious metals, since they’re both beholden to their “parent” asset classes.  They do provide more insight into global capital flows, which will be useful as we all navigate the 4th turning.

If you aren’t familiar with the “turnings” or generational cycles, do yourself a favor and research Social Cycle Theories; they provide critical insight into the current social and geopolitical upheaval we’re seeing today.

Sidenote:  If you haven’t read or listened to the Neil Howe’s books on the subject, do yourself another favor and get them.  Or do me a favor and get one or both via these Amazon affiliate links:

• The Fourth Turning: An American Prophecy – What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny
• The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End

Speaking of precious metals, gold and silver continue their historic runs, breaking to and through all time highs on an almost daily basis. Other metals and rare earth elements ( Palladium, Platinum, Uranium, Copper, etc. ) are moving as well, though not as dramatically. If you’re allocating to those assets, make sure you’re managing the size of those positions and booking gains when price is in overbought territory.

The final figure for third quarter GDP was +4.4%; higher than initial estimates and year over year, putting the U.S. economy firmly on the growth side.  The positive rate of change should show up in 2025 Q4 figures (when released), and carry through this quarter too (Q1 2026).

November PCE ( headline and core ) increased slightly versus October readings.  Given the issues with data collection during the government shutdown, don’t put too much faith in these figures.

In the “tariff” space, Greenland-related tariffs were dropped, after reports of a “framework for a future deal” regarding the Arctic region with NATO. Then on Saturday, President Trump threatened a 100% tariff on all Canadian imports if Canada finalizes its new trade deal with China (lowering tariffs on Chinese electric vehicles in exchange for reduced Chinese tariffs on Canadian farm products). It’s likely a war of words will ensue.  After each side has postured enough to satisfy their constituents, some kind of agreement will be reached.

This week, the FOMC releases their latest decision on interest rates ( Wednesday ), and December PPI is released Friday.  We also get Mag 7 earnings from $AAPL, $TSLA, $MSFT, and $META.  And there’s the looming possibility of another shutdown for the U.S. government at the end of the week.

Best to Your Week!

PS: If you’re interested in ways to incorporate generational cycle theory into your portfolio, Neil Howe co-leads a fund with Hedgeye Asset Management: https://www.hedgeyeam.com/heft (not an affiliate link or investment advice, just a practical application).

P.S. If you find this research helpful, please tell a friend.
If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, TradingEconomics.com

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