Since early June 2026, US equities have largely traded sideways. Investors have had plenty of reasons to be cautious: uncertainty over the Fed's hiking cycle, another leg higher in energy costs, the approaching US midterms, and rising bond yields in the US, Europe, and Japan, which prompted US Treasury intervention. The AI trade has also been repriced after the collapse of a highly leveraged AI hedge fund, a blow-up potentially triggered by a financial regulator capping leveraged ETFs heavily concentrated in AI names. Safety concerns and intensifying competition have added further uncertainty around the timing of Anthropic's highly anticipated IPO.

In this report, we take a snapshot of the key country and sector ETFs and assess the monetary and economic backdrop. The central question is whether these uncertainties, also reflected in weak market breadth, will push stocks lower or resolve and allow the market to resume its advance.

On one hand, US equities are approaching the point in the four-year presidential cycle where the uptrend has historically resumed. On the other, stocks are trading materially higher than they typically have at this stage ahead of past midterms. This report examines whether the rally is set to resume, or whether the S&P 500 under Trump will instead catch down to its typical cycle performance.

Our accompanying chart book covers all the major ETFs to help implement these views.

Please find attached our 22-page ETF chart book with 42 ETF charts.