Weekly Market Recap – Week Ending Oct 02, 2026
U.S. equity markets were mixed this week, with gains in technology-related areas offset by weakness across several broader market and defensive sectors. The NASDAQ 100 ETF (QQQM) rose 0.70%, supported by a 1.80% gain in Technology (XLK), while the S&P 500 ETF (SPYM) slipped 0.22%. Energy (XLE) and Utilities (XLU) also posted gains, but Financials (XLF), Health Care (XLV), Communication Services (XLC), Materials (XLB), Consumer Staples (XLP), Real Estate (XLRE), Small Caps (VB), and Dividend Equity (SCHD) moved lower, showing that market breadth remained selective. Stock-specific momentum remained strong in technology, semiconductors, software, and biotechnology, led by Everpure (P), Moderna (MRNA), Datadog (DDOG), Credo Technology (CRDO), Murata Manufacturing (MRAAY), and United Microelectronics (UMC).
Trade ValuEngine supported portfolio strategies, www.ValuEngineCapital.com
In the below tables we use major ETF’s as a proxy for some major indexes as well as each of the sector groups into which we divide the overall markets. Tracking these over time provides a more defined picture of the US markets than simply tracking major indexes. This is followed by notable individual stock movers over the past month, and finally our full strategy outlook. In this week’s update we continue on after the initial summary to expand into Year to Date and third quarter performance. There are some things happening.
Last Week ETF/Sector performance:
| Ticker | Name | VE Rating | Last Week’s Close Price | Weekly Change |
| QQQM | Invesco NASDAQ 100 ETF | 5 | 306.54 | 0.70% |
| SCHD | Schwab US Dividend Equity ETF | 2 | 33.21 | -1.48% |
| SPYM | State Street SPDR Portfolio S&P 500 ETF | 4 | 90.8 | -0.22% |
| VB | Vanguard Morningstar Small-Cap ETF | 3 | 289.7 | -0.25% |
| XLB | State Street Materials Select Sector SPDR ETF | 1 | 49.8 | -1.89% |
| XLC | State Street Com Svc Sel Sec SPDR ETF | 2 | 112.96 | -2.34% |
| XLE | State Street Energy Select Sector SPDR ETF | 3 | 62.04 | 1.26% |
| XLF | State Street Financial Sel Sec SPDR ETF | 2 | 54.84 | -2.46% |
| XLI | State Street Industrial Select Sector SPDR ETF | 3 | 170.43 | -0.28% |
| XLK | State Street Technology Select Sector SPDR ETF | 5 | 196.27 | 1.80% |
| XLP | State Street Consumer Staples Sel Sect SPDR ETF | 1 | 82.06 | -1.86% |
| XLRE | State Street Real Estate Select Sector SPDR ETF | 1 | 41.56 | -1.80% |
| XLU | State Street Utilities Select Sector SPDR ETF | 1 | 39.51 | 0.81% |
| XLV | State Street Health Care Select Sector SPDR ETF | 2 | 170.7 | -2.65% |
| XLY | State Street Consumer Disc Sel Sect SPDR ETF | 1 | 110.56 | -0.47% |
Current ValuEngine reports on all covered 5000+ stocks and ETFs can be viewed HERE
Last Week Top 3 Stock Performers (Global):
| Ticker | Name | VE Rating | Last Close Price | Price 30 Days Ago | Monthly Difference |
| CRDO | Credo Technology Group Holding Ltd | 5 | 218.64 | 167.75 | 30.34% |
| MRAAY | Murata Manufacturing ADR | 5 | 27.54 | 22.77 | 20.95% |
| UMC | United Microelectronics Corp | 5 | 26.27 | 21.82 | 20.39% |
Last Week Top 3 Stock Performers (US):
| Ticker | Name | VE Rating | Last Close Price | Price 30 Days Ago | Monthly Difference |
| P | Everpure Inc | 5 | 140.14 | 101.14 | 38.56% |
| MRNA | Moderna Inc | 4 | 190.01 | 140.33 | 35.40% |
| DDOG | Datadog Inc | 5 | 277.22 | 210.23 | 31.87% |
Free Trial: Direct Access to ValuEngine Research on over 5,000 stocks and 700 ETFs HERE
Strategy Note:
Each week we provide an update as to how benchmark index ETFs and Select Sector SPDR ETFs performed in the past week, as show above. Going into the fourth quarter, we decided to back that up with a year-to-date, 3rd quarter vs. first half review. We also provide comparisons to how the StateStreet S&P 500 ETF Trust (SPY) performed in three different time periods to glean insights.
Here are the indexes beyond SPY include in the analysis,
- SPYM (State Street SPDR Portfolio S&P 500 ETF): This passively managed fund tracks the S&P 500 Index, providing low-cost exposure to the 500 largest US large-cap corporations. (Note: Formerly traded under the ticker SPLG).
- QQQM (Invesco NASDAQ 100 ETF): Known as the “QQQ Mini,” this ETF tracks the Nasdaq-100 Index, offering concentrated exposure to the largest non-financial innovative, tech, and growth leaders at a lower expense ratio than flagship QQQ.
- MDY (SPDR S&P MidCap 400 ETF Trust): Tracks the S&P MidCap 400 Index, targeting established middle-tier US corporations positioned between aggressive small-caps and mature large-caps.
- IWM (iShares Russell 2000 ETF): Tracks the Russell 2000 Index, serving as the primary benchmark for US small-cap equities to capture high-growth economic cycles.
- VTV (Vanguard Value ETF): Tracks the CRSP US Large Cap Value Index, targeting major undervalued US equities with strong balance sheets, stable earnings, and higher dividend distribution characteristics.
- VUG (Vanguard Growth ETF): Tracks the CRSP US Large Cap Growth Index, prioritizing fast-growing US large-cap corporations with strong forward earnings expansion potential.
- SCHD (Schwab U.S. Dividend Equity ETF): Tracks the Dow Jones U.S. Dividend 100 Index, emphasizing high-yielding, fundamentally sound US companies with a strict 10-year track record of consistent dividend payments.
- VEU (Vanguard FTSE All-World ex-US ETF): Tracks the FTSE All-World ex US Index, offering extensive diversification across international developed and emerging stock markets, completely excluding US equities.
- EEM (iShares MSCI Emerging Markets ETF): Tracks the MSCI Emerging Markets Index, providing direct equity exposure to developing global economies (e.g., China, India, Taiwan, Brazil).
- GLDM (SPDR Gold MiniShares Trust): A physically backed commodity vehicle designed to track the spot price of Gold bullion, operating as a portfolio hedge against inflation and volatility at a reduced share price entry point.
- IBIT (iShares Bitcoin Trust): A spot cryptocurrency vehicle that tracks the market price performance of Bitcoin, allowing direct digital asset exposure through standard brokerage accounts.
- TLT (iShares 20+ Year Treasury Bond ETF): Tracks an index of U.S. Treasury bonds with remaining maturities greater than 20 years, serving as a primary safe-haven asset highly sensitive to federal interest rate changes.
Current ValuEngine reports on all covered 5000+ stocks and ETFs can be viewed HERE
|
Ticker |
|
2026 Q1 through Q2 % Price Chg |
2026 Q3 % Change |
YTD Price Change |
1-Yr Rolling Price Chg |
Ann. Std. Deviation |
P/E Ratio |
Div. Yield |
|
VE Rating |
(Jan 1 – Jun 30) |
(Jul 1 – Sep 30) |
(9-Month) |
(Vol.) |
||||
| SPYM |
4 |
6.7% |
4.7% |
11.7% |
12.7% |
14.2% |
24.1 |
1.3% |
| QQQM |
5 |
15.3% |
4.7% |
20.7% |
31.0% |
18.4% |
30.1 |
0.5% |
| MDY |
3 |
13.7% |
-5.6% |
9.7% |
11.4% |
16.1% |
14.7 |
1.3% |
| IWM |
4 |
20.5% |
-7.3% |
11.7% |
17.2% |
19.8% |
18.2 |
1.1% |
| VTV |
3 |
13.3% |
-1.1% |
12.1% |
12.7% |
11.5% |
20.1 |
1.9% |
| VUG |
5 |
2.1% |
8.9% |
11.2% |
12.5% |
17.9% |
34.2 |
0.5% |
| SCHD |
2 |
15.7% |
1.4% |
17.3% |
30.0% |
12.5% |
16.4 |
3.4% |
| VEU | N/A |
5.1% |
2.2% |
7.4% |
9.2% |
13.8% |
15.1 |
2.9% |
| EEM | N/A |
3.4% |
4.2% |
7.7% |
8.4% |
16.5% |
12.8 |
2.4% |
| GLDM | N/A |
11.2% |
6.4% |
18.3% |
21.5% |
14.1% |
— | — |
| IBIT | N/A |
28.4% |
-12.1% |
12.9% |
45.2% |
48.3% |
— | — |
| TLT | N/A |
-4.2% |
-3.8% |
-7.8% |
-5.4% |
14.2% |
— |
5.0% |
| SPY (5-Yr Avg) |
4 |
9.1% |
2.1% |
11.5% |
13.2% |
15.8% |
23.6 |
1.3% |
| SPY (10-Yr Avg) |
4 |
10.3% |
2.0% |
12.6% |
11.9% |
15.3% |
20.5 |
1.6% |
| SPY (20-Yr Avg) |
4 |
8.5% |
1.8% |
10.2% |
10.3% |
15.3% |
16.8 |
1.9% |
A discerning reader looking at the core portfolio tracking matrix—particularly the relationship between the specialized ETFs and the multi-year SPY benchmarks at the bottom—can extract several institutional-grade insights about market regime shifts, risk pricing, and diversification efficacy.
1. Growth Outpaces the 20-Year Baseline
The QQQM (+20.68%) and VUG (+11.21%) YTD returns significantly outpace the SPY 20-Year Average (+10.15%). This confirms that the market’s secular regime remains firmly anchored in mega-cap growth and technology expansion, rather than reverting to long-term historical means.
2. A Violent Style Rotation Shook Q3
A sharp divergence emerged in Q3: VUG jumped +8.88% while VTV slid -1.06%. This indicates a powerful mid-year rotation where capital rapidly abandoned defensive value positions to chase high-beta growth momentum.
3. Small and Mid-Caps Are Showing “Fake-outs”
Both IWM (Small-Cap) and MDY (Mid-Cap) posted massive, explosive gains in first half of the year (+20.52% and +13.74%), only to aggressively surrender some of those gains in Q3 (-7.32% and -5.55%). This technical failure suggests that broader market participation is weak, and small/mid-caps are struggling to sustain breakouts.
4. Arithmetic vs. Geometric Distortions Hidden in the Benchmark
By utilizing simple numerical averages for the SPY benchmarks, the 1-Yr Rolling Price Changes (5-Yr: +13.15%, 10-Yr: +11.85%, 20-Yr: +10.33%) appear higher than traditional geometric (CAGR) returns. A discerning reader will recognize that this presentation strips out the compounding “volatility drag” of market downturns.
5. Dividend Yields Compete with Volatility Profiles
SCHD offers a 3.36% dividend yield with an annualized standard deviation of 12.5%. When compared to VTV (1.87% yield, 11.5% volatility), SCHD delivers nearly double the income distribution for only a marginal increase in total portfolio risk, making it a highly efficient equity income engine.
6. The Long-Term Valuation Creep Is Real
The numerical average P/E ratio shifts from 16.80 (20-Yr) to 20.54 (10-Yr), and up to 23.64 (5-Yr). This structural expansion proves that equity investors have become willing to pay progressively higher premiums for corporate earnings over the last two decades.
7. Core Diversification Failed Outside the US
International exposure via VEU (+7.41% YTD) and EEM (+7.69% YTD) under-performed almost every domestic large-cap strategy. Despite lower P/E ratios (15.10 and 12.80), international equities acted as a drag on total return rather than a helpful diversifier.
8. The Safe-Haven Anchor is Broken
Typically used to balance equity risk, TLT lost -7.81% YTD while exhibiting a 14.2% standard deviation—a volatility profile practically identical to international stocks (VEU at 13.8%). This highlights a broken correlation regime where long-duration bonds fail to provide a safe haven during equity drawdowns.
9. The Popularity of “Buffered” ETFs has Grown Exponentially
Double-digit losses in TLT and other treasury-bond ETFs has spooked investors badly. Many have turned to buffered ETFs as a better way of building in a safe-harbor to participate in stock market rallies but to mitigate participation in a decline. First Trust operates the category’s largest individual fund by assets, the FT Vest Laddered Buffer ETF (BUFR).
10. Digital vs. Physical Alternative Assets Diverged
Alternative asset classes showed completely uncorrelated behaviors: GLDM (Gold) posted a remarkably steady +18.32% YTD gain with low relative volatility, while IBIT (Bitcoin) surged +12.86% YTD but subjected investors to a massive -12.10% Q3 drawdown and a crushing 48.3% standard deviation.
11. SPYM and SPY Averages Reveal a Premium Market
The current core benchmark SPYM holds a 24.10 P/E ratio, which sits higher than the 5-year, 10-year, and 20-year historical averages. This indicates that the broader market enters the final stretch of the year trading at an historically expensive valuation multiple.
12. Look for the “M” as the Fourth Letter in the Ticker Symbol
Savvy investors will buy: SPYM in lieu of SPY; GLDM in lieu of GLD and QQQM in lieu of QQQ, The “m” is supposed to stand for mini, but the only actual differences are lower prices per shares and much lower fees. SPYM not only has a fee less than 25% that of SPY but also is considerably more efficient resulting in slightly higher returns since the structure of SPY is antiquated. Its UIT structure does not allow it to reinvest dividends or lend securities. GLD has a very high expense ratio of 0.40% as compared with mini GLDM with a fee of 0.10%.
Turning to how the sectors have done so far this year, there are few surprises here relative to the recent week. The breakdown of the StateStreet Select Sector SPDRs along with key industry themes are as follows:
• XLB (Materials): Chemicals, metals, and construction materials companies.
• XLC (Communication Services): Telecom, social media, and entertainment firms.
• XLE (Energy): Oil, gas, and energy equipment providers.
• XLF (Financials): Banks, insurance companies, and asset managers.
• XLRE (Real Estate): Real Estate Investment Trusts (REITs).
• XLK (Technology): Software, hardware, and semiconductor manufacturers.
• XLI (Industrials): Aerospace, defense, machinery, and logistics companies.
• XLP (Consumer Staples): Household goods, food, and hygiene products.
• XLU (Utilities): Electric, gas, and water utility operators.
• XLV (Healthcare): Pharmaceuticals, biotech, and medical equipment.
• XLY (Consumer Discretionary): Retailers, automakers, and luxury services.
Current ValuEngine reports on all covered 5000+ stocks and ETFs can be viewed HERE
|
Ticker |
|
2026 H1 % Price Chg |
2026 Q3 % Chg |
YTD Price Chg |
1-Yr Rolling Price Chg |
Ann. Std. Dev. |
P/E Ratio |
Div. Yield |
|
VE Rating |
(Jan 1 – Jun 30) |
(Jul 1 – Sep 30) |
(9-Mth) |
(Volatility) |
||||
| XLB |
2 |
11.2% |
-4.2% |
6.5% |
13.7% |
14.8% |
17.5 |
1.72% |
| XLC (Communication) |
2 |
-2.1% |
-2.6% |
-4.7% |
14.2% |
16.9% |
25.1 |
1.2% |
| XLE (Energy) |
3 |
28.1% |
16.8% |
44.9% |
38.4% |
22.4% |
12.4 |
3.4% |
| XLF (Financials) |
2 |
4.1% |
2.1% |
6.3% |
11.8% |
14.1% |
15.8 |
1.9% |
| XLRE (Real Estate) |
1 |
8.2% |
2.8% |
11.0% |
8.2% |
18.5% |
32.4 |
3.5% |
| XLK (Technology) |
5 |
21.4% |
8.4% |
29.8% |
35.2% |
20.1% |
32.6 |
0.7% |
| XLI |
3 |
9.2% |
4.3% |
13.5% |
16.7% |
15.2% |
26.3 |
1.1% |
| XLP (Staples) |
1 |
7.2% |
3.6% |
10.8% |
9.3% |
11.8% |
21.9 |
2.6% |
| XLU (Utilities) |
1 |
1.9% |
-1.7% |
0.2% |
-4.5% |
15.5% |
17.6 |
3.1% |
| XLV (Healthcare) |
2 |
6.4% |
4.7% |
11.1% |
12.5% |
13.2% |
19.4 |
1.6% |
| XLY (Discretionary) |
1 |
0.8% |
-2.8% |
-2.0% |
14.1% |
17.4% |
24.8 |
0.9% |
| SPYM |
4 |
6.7% |
4.7% |
11.7% |
12.7% |
12.2% |
24.1 |
1.3% |
Trade ValuEngine supported portfolio strategies, www.ValuEngineCapital.com
Key insights include:
- Growth Heavyweight Dominance: SPYM‘s 2026 performance (+11.66% YTD) is heavily skewed by a tiny group of sectors. XLK (+29.83% YTD) and XLB (+17.19% YTD) are the primary engines dragging the cap-weighted index upward.
- The Energy Alpha Engine: XLE (+44.89% YTD) has completely decoupled from the broader market baseline. It delivered nearly 4x the return of SPYM with a higher but highly efficient volatility profile (22.4% Std. Dev.).
- Defensive Capitulation Drag: XLY (-1.95% YTD) and XLC (-4.72% YTD) acted as massive anchors on SPYM’s upside. Their weakness explains why the total index trailed behind its pure technology components.
- The Yield-Hunting Value Trap: High-dividend sectors like XLU (+0.19% YTD) and XLP (+10.75% YTD) underperformed SPYM‘s capital gains. This demonstrates that chasing defensive yield in a growth-led environment results in severe underperformance.
- Valuation Multiple Expansion: SPYM commands a steep 24.10 P/E ratio. This premium is driven entirely by XLK (32.60 P/E) and XLRE (32.40 P/E), making the core index historically expensive relative to standard cyclical valuations.
- Financials as a Low-Beta Stabilizer: XLF (+6.26% YTD) underperformed SPYM but exhibited remarkably muted volatility (14.1% Std. Dev.). This positions the financial sector as a stabilizing force within the broader index.
- Severe Technical Divergence: While SPYM sits at a high-level valuation plateau, its underlying sectors are experiences extreme fractures. XLK is severely overbought (RSI > 83) while XLU and XLP are critically oversold (RSI < 33), highlighting a deeply fragmented market under the surface.
Not to blow our own horn, but last week on an individual stock basis we anticipated Micron Technology’s (MU) impending report and noted several tech names, also rated 5 (Strong Buy) from ValuEngine, that were likely to rise from the report along with MU if it exceeded expectations. When it did so, these names did indeed followed suit. The risers include:
• Advanced Micro Devices (AMD): +4.28% (Led the group’s upward push as a direct peer in advanced AI memory architecture needs).
• NVIDIA Corporation (NVDA): +3.65% (Rallied aggressively on confirmation that data center and high-bandwidth memory infrastructure spending continues to accelerate).
• Broadcom Inc. (AVGO): +2.94% (Gained solid ground as macro chip demand fears evaporated).
All retain their 5 rating from ValuEngine as of this writing.
Finally, now that we are getting closer to the midterm results, historically we are closer to a year-end upswing. Since the historical 3rd quarter downturn never happened, it remains to be seen if we’ll have a fourth quarter upswing anyway. That said, between the momentum of continued strong earnings reports for the largest cap tech and energy stocks combined with a growing expectation that gridlock will return to Congress, and given that we still rate QQQ with a 5 and SPYM with a 4 (Buy), we look for the upward momentum in large cap to continue. It also now looks like any continuation of the great rotation which started in the first half of this year will have to wait until 2027 at the earliest.
Herb Blank
Chief Quantitative Analyst, ValuEngine.com
www.ValuEngine.com (ValuEngine, Inc) is a stock valuation and forecasting service founded by Ivy League finance academics. VE utilizes the most advanced quantitative techniques and analysis available to analyze over 4,200 US stocks, 700 US ETFs, and 1,000 Canadian stocks. Fair market valuations, forecast target prices, and buy/hold/sell recommendations are updated DAILY.
Full Two Week Free Trial HERE
www.ValuEngineCapital.com (ValuEngine Capital Management, LLC) is a Registered Investment Advisory firm that trades six distinct portfolios based upon the ValuEngine.com research models. Each portfolio has a different risk/return profile. Clients can be placed in strategies that fit their specific investment needs, or allocated across several portfolios. Funds can be shifted across the portfolios quickly to accommodate changes in the markets and needs of the client. Much of the content and data in these blogs is directly used in the ValuEngine Capital portfolios, including the ValuEngine model data on over 5,000 stocks and 750 ETFs to search for positions in each portfolio. Details and performance is available on www.ValuEngineCapital.com and upon request.
clientservices@ValuEngineCapital.com
View Portfolio descriptions and performance HERE
BLOG.VALUENGINE.COM for the full history of ValuEngine.com financial blog posts