On a weekly closing basis, the S&P 500 is only a few points away from an all-time high. Let that sink in.
The news is filled with stories about how the hyperscalers are rolling over, and I've seen more than a few calls for a top in semiconductors. Yes, those are important developments. If the hyperscalers continue to weaken and the semis join them, it will be a difficult environment for equities.
However, if you look away from the AI narrative for a moment, you'll see that asset markets remain objectively risk-on.
S&P 500
Let's be clear: the S&P 500 is the most important equity market metric in the world. It is the benchmark against which most investors and strategies are measured. It has been consolidating for about six weeks, but it continues to hold above its rising 60-week moving average.
We've been saying that the index is simply pausing after a strong run that produced an extended condition. We can see that in the 60-week Z-score, which moved above two in late May.
Source: Optuma
High Yield Bonds
While the S&P 500 sits near record levels, so do high-yield bonds. On a total return basis, the iShares iBoxx High Yield Corporate Bond ETF (HYG) continues to move up and to the right.
While price is close to, but not quite at, record highs, the trend relative to aggregate bonds is at an all-time high.
Translation: investors continue to prefer the riskier part of the fixed-income market.
Source: Optuma
The Message From Commodities
While the absolute moves in gold and silver receive all the attention, very few people discuss their relationship with their blue-collar counterparts.
The ratio of Industrial Metals to Precious Metals is reversing a multi-year downtrend as it moves above its 200-day moving average. That moving average has shifted from declining to flat, an important development.
At the same time, using Stochastic RSI as a measure of momentum, we see the ratio at multi-year highs.
Source: Optuma
The VIX
Meanwhile, the S&P 500 Volatility Index (VIX) continues to work back toward the lows established earlier in 2026.
Fear remains in short supply.
Source: Optuma
Bitcoin
Even Bitcoin is showing early signs of stabilization. Our momentum model made a higher low while price made a lower low in early July.
To be clear, the model remains bearish, just as it has been since last November. However, it is becoming less negative, and sometimes less bad is good enough.
Source: Optuma
Final Thoughts
While everyone else is looking for signs of a bubble popping in AI, there is objective evidence that the market is becoming more risk-on, not less. That evidence can be seen across asset classes, all you have to do is look.
