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There are unmistakable parallels between September’s likely Fed rate cut and the initial lowering of rates preceding the GFC. In each case, despite leading inflation gauges still trending up, a housing slump and deteriorating labor market served to justify the move. In 2007, after the Fed cut, measures of real growth failed to respond and inflation, in fact, shot higher.

The Fed has been neither correct nor anticipatory for an extended period of time. Ironically, if a September rate cut were followed by a decline into recession later this year, the Fed may be hailed as both correct and anticipatory—and some semblance of Fed independence could be maintained.

After a springtime scare, the stock market has shrugged off more than its fair share of troubles. We offer some quick observations on a range of topics, including our stance on the bull market and historical comparisons, IPO and speculative activity, equity leadership, and the economy/interest rates/inflation.

A Fed that’s been incapable of controlling the intensity of the flame will soon be supplying it with more oxygen in an attempt to stimulate real activity. The odds are that any new fuel on the fire will find its way into consumer prices, long before it stimulates “unit growth” in slumping sectors.

Inflation and bond yields, alike, remain well behaved, which is a positive for risky assets. Among fixed income, we are still constructive toward higher-quality credit.

An examination of how large- and small-cap companies allocate cash across three main uses: investment (Capex and R&D), shareholder returns (dividends and buybacks), and M&A. We further evaluate how, over time, the market rewards or penalizes each.

The second quarter of 2025 posted another “all green” earnings waterfall, as each component of our profit breakdown gained ground. Sales growth was a robust 6.9%, paving the way to a 17.6% gain in net income for S&P 500 members

The Magnificent 7 constitutes 34% of the S&P 500 and comprises seven of the eight largest companies in the index. We explore a few of the disguises the market has been wearing during this mega-cap growth era, looking behind the mask at the broad swath of equities hidden by the Mag 7’s dazzling veil.

Read this week's Major Trend.

The S&P 500 notched its fourth consecutive monthly gain through August, advancing 2%. Over that span, our downside estimate for the index to return to its historical median level (1995-forward) widened from -24% to -32%.

The S&P 500’s Q2 estimated bottom-up operating EPS has now increased 4% since the start of reporting. This V-shaped recovery has erased the discount in earnings seen after “Liberation Day”; EPS estimates now stand even with those at the end of March. Despite the higher revisions for the current quarter, projections for the final two quarters of 2025 have only leveled off from their tariff-scare down-leg.

Read this week's Major Trend. 

• Read the latest MTI update

Read the latest MTI commentary.

NVIDIA’s rise has reshaped the S&P 500 like never before. In just 18 months, the company has doubled its share of the index, hitting an unprecedented 8% weight. What does that mean for investors, for the balance of power among mega-caps, and for the old “4% Club” warning system? Phil Segner breaks it down in this episode of the Leuthold Podcast.

The Core, Select Industries, and Grizzly strategies all posted declines in July, though Grizzly held up relatively well in a strong equity market. Core remains modestly net long with the Major Trend Index in High Neutral, while Select Industries saw strength in cyclical areas like Travel & Leisure and Banks but weakness in Education Services and Health Care. Positioning reflects targeted overweights in sectors and industries with favorable growth and valuation profiles, while avoiding areas with heightened risk or weak fundamentals.

Read this week's update

The cyclical sectors of Consumer Discretionary, Industrials, and Materials have climbed from the bottom of our sector rankings, three months ago, to now occupy the fourth, fifth, and sixth positions, respectively.

NVDA’s 13% gain contributed just under half of the S&P 500’s +2.2% return for the month. The chipmaker ended July with an 8.1% index weight. Since 1990, there’s never been an 8% month-end weight from a single firm. The weight of NVDA and MSFT is equal to the combined weight of the smallest 332 firms in the S&P 500.

Our Deep Cyclical Group has been on a tear over the past three months, rising 18%. The S&P 500 High Beta Index has done even better, with a 30% gain over that time.