Market insights and analysis

By Will Hubbard

Market snapshot

•  Stocks posted modest losses last week on tariff uncertainty.

•  Bond yields rose as investors look to demand a premium for the risk of holding fixed-income securities amid tariff and inflation uncertainty.

•  Gold continues to set a new base following some of its most rapid growth in years.

•  Market indicators and outlook: Strategy positioning was generally long, with very little activity last week. Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.

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Index summary

Equity markets fell broadly last week, with all major indexes posting modest losses. Energy was the top-performing sector, gaining 2.48%. The S&P 500 lost 0.29%, the NASDAQ Composite was down 0.06%, the Dow Jones Industrial Average declined 1.01%, and the Russell 2000 fell 0.62%. The 10-year Treasury yield rose from 4.35% to 4.41%. Gold rose 0.89%.

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.

Stocks

Stocks were down slightly last week as investors grappled with renewed uncertainty around President Trump’s tariff policies. The market is finding it difficult to navigate the shifting signals, as the administration’s approach seems to be to “move fast and adjust slowly.”

Economic data was light. The main release was weekly jobless claims, which came in at 227,000 compared to the forecast 236,000.

The Federal Open Market Committee (FOMC) minutes from the June meeting also drew attention. The minutes confirmed the committee’s cautiously optimistic tone and continued “wait and see” approach. The Fed emphasized monitoring risks related to geopolitical tensions and evolving tariff policy.

Bespoke Investment Group highlighted this same “wait and see” environment in its commentary on tariffs and inflation expectations. Following President Trump’s broad tariff mandate earlier this year, many economists, pundits, and money managers forecast a sharp rise in inflation. But the last four consumer price index (CPI) and producer price index (PPI) releases—headline and core—have all come in weaker than expected. Bespoke noted that this is the first time since 1998 that all four inflation readings have surprised to the downside four times in a row.

The key takeaway for investors is to remain nimble. While historical data provides important context, markets often react differently than expected—especially in periods of policy uncertainty. Using history as a guide, not a guarantee, can help support a more adaptive approach to portfolio allocation.

Bonds

Treasury yields generally rose across all maturities last week, with the benchmark 10-year yield increasing from 4.35% to 4.41%. The yield curve remains mostly normal, with the two-year yield at 3.9% and the 30-year Treasury approaching 5%.

In credit markets, high-yield corporate bonds outperformed Treasurys as spreads tightened to near year-to-date lows. Investors continue to hunt for income amid muted equity returns. Investment-grade issuance remained strong, with many new deals oversubscribed. The combination of steady Fed rates and reassuringly robust economic data is keeping corporate funding conditions favorable.

That said, rising geopolitical risks remain a concern. If international relationships deteriorate, we may see a shift toward more defensive fixed-income allocations. While the Fed has signaled it may lower rates, uncertainty around tariffs and isolationist policies could push rates higher if investors demand greater compensation for the risk of holding fixed-income securities.

Gold

Gold experienced a volatile week, starting in the red before rebounding to end the week up 0.89% at $3,355.59 per ounce.

From a broader technical perspective, gold appears to be forming a new price base after its recent rally. This base has been consolidating since early April, with support around $3,150 per ounce and resistance near $3,450.

While gold seems to be in a holding pattern for now, the story isn’t over. Ongoing geopolitical tensions, trade policy uncertainty, and the ongoing debate between gold and bitcoin suggest that the metal may return to headlines—though whether for gains or losses remains to be seen.

Flexible Plan Investments is the subadvisor to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX), designed at its introduction 11 years ago to track the daily price changes in the precious metal.

The indicators

The QFC S&P Pattern Recognition strategy started last week 40% short, increased to 80% short on Monday’s close, reduced to 50% short on Tuesday, moved to cash on Wednesday, and returned to 50% short on Thursday, where it remained for the week. Our QFC Political Seasonality Index remained in its risk-on posture. (Our QFC Political Seasonality Index is available—with all of the daily signals—post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

Our intermediate-term tactical strategies have been varied in their degree of defensive positioning. The key advantage these strategies offer investors is their ability to adapt to changing market environments—participating during uptrends and adjusting exposure to more defensive posturing during downtrends.

The Volatility Adjusted NASDAQ (VAN) strategy started the week 100% long and increased to 120% long on Thursday, where it remained for the week. The Systematic Advantage (SA) strategy maintained a 90% long exposure throughout the week. Our QFC Self-adjusting Trend Following (QSTF) strategy maintained a 200% long position throughout the week. These strategies can use leverage, so their exposure may exceed 100%.

Our Classic model was long risk-on positioning all week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on more restrictive platforms and can take up to one month to generate a new signal.

FPI’s Growth and Inflation measure—one of our Market Regime Indicators—shows that we are in a Normal economic environment (characterized by falling inflation and growing GDP). Historically, a Normal environment has occurred 60% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Gold tends to outpace both stocks and bonds on an annualized return basis in a Normal environment but carries a substantial risk of a downturn in this stage.

Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 37% of the time since 2003. All three asset classes tend to have a positive return in this environment.