Mag 7 Saves The Day While The Rest Of The Market Waits

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The market found its footing today as investors tiptoed back into tech after last week’s AI-driven selloff.

The Nasdaq led the rebound, with chip stocks doing much of the heavy lifting. Intel jumped 5% following an analyst upgrade, while AMD and Micron joined the party with solid gains of their own.

The bigger story, however, is that the AI trade is entering a new phase.

The conversation seems to be shifting from “How much can companies spend?” to “What kind of return are they getting for all that spending?” That’s a healthy debate, but it has traders a bit more cautious than they were a month ago.

Under the surface, the market wasn’t quite as strong as the headline indexes suggested. Breadth remained weak, sentiment is getting gloomier, and options traders continue loading up on protection.

In other words, the Magnificent Seven were once again carrying more than their share of the furniture.

Meanwhile, rising bond yields, firmer oil prices, and ongoing geopolitical tensions kept traders from getting overly enthusiastic.

Still, considering today marks the 39th anniversary of Black Monday, a modest gain in stocks and only a little market anxiety feels like a pretty good outcome.

The question now is: was today’s bounce the start of a renewed tech rally, or just a breather before traders demand more proof that the AI spending boom still has plenty of runway?

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ETFs On The Cutline – Updated Through 10/16/2026

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (154 vs. 140 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For October 16, 2026

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

WHEN AI MEETS INTEREST RATES: THIS WEEK’S MARKET LESSON

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Watching the markets, I’d say this week’s story was pretty simple: the AI trade finally met its toughest competitor… higher interest rates.

Money continued rotating out of AI and semiconductor names, with chip stocks taking another step lower and the broader AI basket finishing the week deep in correction territory.

What’s interesting is that this wasn’t a market-wide retreat. Financials held up well, the Dow actually gained ground for the week, and bond yields eased after Wednesday’s spike.

Meanwhile, investors were juggling hotter inflation data, $100+ oil, and a growing realization that the cost of capital matters a lot when future growth is the main attraction.

Gold and bitcoin ended the week largely unchanged, proving that sometimes the most exciting thing an asset can do is absolutely nothing.

The bigger question now is whether this is simply another healthy AI correction we’ve seen before, or the start of a longer reset in leadership.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 10/15/2026

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, October 15, 2026

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— effective 5/20/2025

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +4.53% and remains in “Buy” mode, with our holdings being subject to our trailing sell stops.

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AI Doubts And Inflation Fears Leave Markets Searching For Direction

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Today felt a little like a reality check for the AI trade. Traders grew increasingly nervous about whether some companies are spending too aggressively on artificial intelligence, while another round of inflation data reminded everyone that the Fed may not be off the hook just yet.

The Dow came out strong early, but technology stocks struggled to find their footing as concerns around AI spending weighed on sentiment.

The selling was led by CoreWeave, while questions surfaced about whether the revenue growth across parts of the AI ecosystem is keeping pace with the lofty expectations already priced into many chip and infrastructure names.

Meanwhile, September’s inflation data continued to run hotter than investors would like, reinforcing the idea that interest rates could stay higher for longer.

Oddly enough, markets couldn’t seem to agree on the message. Bond yields slipped, oil prices surged, the dollar weakened, gold rallied, and Bitcoin bounced.

When stocks, bonds, commodities, and currencies are all singing different songs, it’s no surprise traders are having trouble finding the rhythm.

The good news? The S&P 500 and Nasdaq managed to claw their way back to roughly unchanged by the close.

The bigger question now is whether the market can keep moving higher if inflation stays sticky and AI leadership starts losing a little of its shine.

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Inflation Reheats, Markets Cool Off

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Markets came into the day hoping inflation would keep cooling, but September’s CPI report had other ideas.

A slightly hotter-than-expected reading sent bond yields higher, strengthened the dollar, and put immediate pressure on stocks as investors once again questioned how long interest rates may stay elevated.

What stood out wasn’t just the inflation data. Several major banks delivered solid earnings, yet their stocks still finished lower, suggesting investors are raising the bar heading into earnings season.

Add in crude oil pushing back above $96, a stronger dollar weighing on gold and crypto, and renewed concerns around AI-related credit risk (CRWV), and you had a recipe for broad-based selling across nearly every asset class.

The Magnificent Seven had been carrying the market lately, but even they couldn’t escape gravity today.

The question now is whether tomorrow’s PPI report can offer some relief, or if inflation and rates will continue to call the tune.

Was today just a bump in the road, or a reminder that the inflation fight may not be over yet?

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