The Major Trend Index dropped to Neutral on dual downgrades in Cyclical and Sentiment; tactical equity exposure holds at 52%. The S&P 500 logged its largest daily loss since the March bounce, ending a four-week run of record closes, with Small Caps lagging. Hot CPI and PPI readings pushed Leuthold's Inflation Scorecard to its highest level since early 2024, making a quick return to disinflation unlikely and lifting 10- and 30-year yields to near one-year highs. Sentiment deterioration is outpacing improvements 4-to-1 as bullish surveys, bullish put/call shifts, an elevated SKEW, and unfavorable seasonality drove the category to -3. Meanwhile, Nasdaq's 50-day outperformance vs. the Dow sits in the 1st percentile since the Tech Bubble, a spread that has petered out at similar levels every time since 2020.
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