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Markets 25 days ago · 20 September 2026

The Fed Hikes, Breadth Retreats: The Regime Holds but Narrows

The Fed raises the target range to 3.75–4.00% with a more hawkish SEP: the curve responds with a bear-flattening move and the dollar firms, while equity breadth narrows around technology and semiconductors.

Fabrizio Ravetto20 September 2026 · 12 min read

The Financial Spectator

WEEKLY INTERMARKET REPORT
W38 · 14–18 SEPTEMBER 2026 · DATA CUT 18/09/2026

DOMINA MARKET INTELLIGENCE · CROSS-ASSET

The Fed's 25 bp hike and a more restrictive SEP relative to June are driving front-end repricing and a bear-flattening of the curve. Credit and volatility remain orderly, but SPY and especially QQQ are holding up far better than participation: RSP, breadth and geography signal increasingly concentrated leadership in technology and semiconductors.

Data cut 18/09/2026 | Week 38

Edited by Fabrizio Ravetto

DOMINA Market Intelligence

Executive Summary

Intermarket thesis. W38 does not signal a systemic shift to risk-off, but it makes the gap between the index and the underlying market more apparent. Risk Appetite remains at 68 — Greed, the VIX falls to 14,8 and credit remains orderly; at the same time the Fed raises the target range to 3,75–4,00% and the SEP lifts the expected rate path. The curve responds with 2Y +13 bp, 5Y +8 bp, 10Y +5 bp and 30Y −1 bp: a bear-flattening that concentrates pressure on the front end. Equity is resilient on the surface only: QQQ gains +0,92% and SPY barely declines −0,34%, yet the share of S&P 500 constituents above the 200DMA falls to 48,5% and those above the 50DMA to 29,2%; A/D at 0,44 and New Highs−Lows at −39. The WPI Multi-asset Long Term remains at 67%, while the Short Term falls to 53%: structure still intact, but tactical deterioration deepening. The central reading is therefore concentrated resilience under a more restrictive monetary impulse, not yet a regime change.

Regime snapshot

DOMINA Market Regime — Risk Appetite, Business Cycle Clock e Canary System — Risk Appetite 68 — Greed · Business Cycle Clock: Expansion · Canary System: Caution · DOMINA Trading Suite.

1. Macro Asset Snapshot

EquityResilient but concentrated

QQQ +0.92% and SPY −0.34% contrast with sharply deteriorating breadth and a weakening RSP.

BondsBear-flattening

TLT bounces on a 1W basis, but Treasury futures remain weak and the front end rises more than the long end.

CommoditiesPause, not reversal

DBC −0.69% on a 1W basis following the W37 rally; still +7.05% on 1M and +15.34% on 3M, with selective internal leadership.

USD / FXUSD strengthening

UUP +1.14% on a 1W basis and DXY improving: the dollar is once again tightening financial conditions.

DOMINA Murphy's 4 Pillars — SPY, TLT, DBC, UUP — Murphy's 4 Pillars · SPY, TLT, DBC and UUP · DOMINA Trading Suite · data cut 18/09/2026.

2. Week-over-Week

Indicator	Previous	Current	Change	Trajectory	Interpretation
Risk Appetite	70 — Greed	68 — Greed	−2	↘	Regime still expansionary, with a slight loss of momentum.
VIX	15,8	14,8	−1,0	↗	Implied volatility more contained; no confirmation of systemic stress.
HYG/LQD	0,7535	0,7500	−0,0035	→	Credit broadly stable and still consistent with an orderly backdrop.
Put/Call	0,78	0,76	−0,02	↗	Options positioning still benign.
HYG/TLT	0,9719	0,9665	−0,0054	→	Slight pullback, with no break of the risk-on signal.
S&P 500 > 200DMA	54,1%	48,5%	−5.6 pp	↘	Structural participation falls below 50%.
S&P 500 > 50DMA	38,4%	29,2%	−9.2 pp	↘	Marked and broad-based tactical deterioration.
Advance / Decline	1,99	0,44	−1,55	↘	The closing session shows a clear predominance of decliners.
New Highs − New Lows	−2	−39	−37	↘	The balance deteriorates, confirming the fragility of breadth.
WPI Multi-asset LT	67%	67%	0 pp	→	Medium-term structure unchanged.
WPI Multi-asset ST	57%	53%	−4 pp	↘	Tactical pressure increasing without a structural break.
SPY · 1W	−1,15%	−0,34%	+0.81 pp	↗	Index more resilient relative to W37.
QQQ · 1W	−0,39%	+0,92%	+1.31 pp	↗	Relative leadership of growth/technology.
IWM · 1W	−2,13%	−1,66%	+0.47 pp	→	Small caps still weak: the improvement remains insufficient.
TLT · 1W	−1,46%	+0,47%	+1.93 pp	↗	Relief on duration, but not on the front end of the curve.
DBC · 1W	+3,75%	−0,69%	−4.44 pp	↘	Weekly pause following the W37 acceleration; 1M/3M trend still strong.
UUP · 1W	approximately unchanged	+1,14%	strengthening	↗	The dollar is once again emerging as a significant driver of financial conditions.

3. Global Indices

DOMINA Global Indices Performance — Performance 1D / 1W / 1M / 3M / YTD · DOMINA Trading Suite · data cut 18/09/2026.

The divergence is clear. QQQ closes the week at +0.92%, while SPY is at −0.34% and IWM remains weak at −1.66%. Outside the United States the picture deteriorates: Eurozone −2.08%, Japan −1.58%, Emerging Markets −1.19% and South Korea −3.93%. Index performance therefore does not reflect a global risk-on environment: it reflects US large-cap/growth leadership that masks geographic dispersion and broad-market weakness.

4. Country Monitor

DOMINA Country Monitor — Global — Global Country Monitor · GRID Rotation · DOMINA Trading Suite · data cut 18/09/2026.

DOMINA Country Monitor — Americas — Americas · GRID Rotation

DOMINA Country Monitor — Europe — Europe · GRID Rotation

DOMINA Country Monitor — Asia Pacific — Asia-Pacific · GRID Rotation

DOMINA Country Monitor — Middle East, Africa e Frontier — Middle East / Africa / Frontier · GRID Rotation

Geographic rotation is selective, not synchronised. Taiwan remains the benchmark of relative strength; Brazil, Greece and Poland maintain a favourable positioning, while large parts of China, India, Turkey and the Middle East remain in the weak quadrants. The KOSPI, following the strong performance of the previous week, records a sharp reversal at −3.93%: a further signal that technology-driven Asian leadership does not equate to a uniform expansion of regional beta.

5. USA Sector Rotation

DOMINA USA Sector Rotation — SPY, RSP, SOX e settori — US sector ETFs · RSP · SOX · GRID Rotation · DOMINA Trading Suite · data cut 18/09/2026.

SOX in improving and XLK in strong are the cornerstone of index resilience. RSP, by contrast, is in weakening and remains more fragile than SPY; XLF is losing momentum, while XLE and XLV retain a more robust relative positioning. The combined reading with breadth is consistent: the cap-weighted market is being supported by a handful of leadership clusters, not by a broadening of participation. RSP is not a breadth measure in isolation, but here it confirms — together with WPI and breadth — the concentration signal.

6. US Yield Curve

DOMINA US Yield Curve — Curve shape · DOMINA Trading Suite. Numerical table: U.S. Treasury, closing yields 18/09/2026; comparison 11/09/2026.

Node	Yield	WoW bp	Reading
2Y	4,76%	+13 bp	More intense repricing at the front end following the FOMC.
5Y	4,86%	+8 bp	Upward pressure on intermediate yields.
10Y	5,01%	+5 bp	Yield above 5%, but move smaller than the 2Y.
30Y	5,34%	−1 bp	Long end broadly stable.

7. Breadth and WPI

S&P 500 sopra 200DMA e 50DMA — S&P 500 · >200DMA 48.5% · >50DMA 29.2% · A/D 0.44 · New Highs−Lows −39.

S&P 500 Advance Decline e New Highs New Lows — S&P 500 · >200DMA 48.5% · >50DMA 29.2% · A/D 0.44 · New Highs−Lows −39.

S&P 500 Sector Breadth · widespread deterioration beneath the surface of the indices.

WPI S&P 500 Long Term — WPI Long Term · Wyckoff Position Index · S&P 500 · 50% Moderate · 9/18 bullish.

WPI S&P 500 Short Term — WPI Short Term · Wyckoff Position Index · S&P 500 · 53% Moderate · 8/18 bullish.

WPI Multi Asset — sintesi Long Term e Short Term — WPI Multi-asset · LT 67% Moderate · ST 53% Moderate.

European participation

Euro Stoxx 50 sopra 200DMA e 50DMA — Euro Stoxx 50 · >200DMA 51.1% · >50DMA 29.8% · A/D 0.09 · New Highs−Lows −5.

Euro Stoxx 50 Advance Decline e New Highs New Lows — Euro Stoxx 50 · >200DMA 51.1% · >50DMA 29.8% · A/D 0.09 · New Highs−Lows −5.

Euro Stoxx 50 Sector Breadth · DOMINA Trading Suite.

WPI Multi-asset — detail

WPI Multi Asset Long Term — WPI Multi-asset Long Term · 67% Moderate.

WPI Multi Asset Short Term — WPI Multi-asset Short Term · 53% Moderate.

Breadth is the principal vulnerability of W38. In the US, the share of names above the 200DMA falls from 54.1% to 48.5% and that above the 50DMA from 38.4% to 29.2%; A/D and New Highs−Lows also deteriorate. Europe presents a similar picture, with the Euro Stoxx 50 at 51.1% above the 200DMA but only 29.8% above the 50DMA, A/D at 0.09 and the highs/lows balance at −5. The WPI Multi-asset Long Term holds at 67%, while the Short Term declines from 57% to 53%: the pressure is tactical and broadening, but has not yet invalidated the medium-term structure.

8. FX

DOMINA FX Rotation — FX GRID Rotation · DXY, EUR, GBP, CAD, AUD, JPY, CHF, NZD · DOMINA Trading Suite.

The dollar is reasserting an active role: UUP gains +1,14% over the week and DXY moves into the improving zone on the GRID. This is consistent with front-end repricing in the US and represents a headwind for EM and assets sensitive to global liquidity conditions. The GRID keeps the yen in the strength zone on the rotational window, but on 18 September the yen weakened following the BOJ rate hike: the event-driven reaction should not be conflated with the relative positioning accumulated over a longer time frame.

9. Commodities

DOMINA Commodity Aggregate Rotation — Commodity Aggregate · Overall GRID of the complex: leadership still present but less uniform.

DOMINA Energy Index Rotation — Energy Index · Energy complex predominantly in the strong quadrant; natural gas closer to the improving phase.

DOMINA Precious Metals Rotation — Precious Metals · Silver, gold and platinum in the strong area; palladium remains weak.

DOMINA Industrial Metals Rotation — Industrial Metals · Copper and HRC showing strength, aluminium improving; nickel remains weak.

DOMINA Grains Rotation — Grains · Broad leadership across the grains/soy complex, with soybean oil in a weaker position.

DOMINA Soft Commodities Rotation — Soft Commodities · Softs highly dispersed: sugar strong; cotton weakening; cocoa, coffee, orange juice and lumber weak.

The weekly −0.69% decline in DBC interrupts the acceleration seen in W37, but does not yet signal a reversal of the commodity theme: DBC remains +7.05% at 1M and +15.34% at 3M. The GRID shows energy, grains, silver/gold/platinum and copper still in favourable positions, while softs are far more fragmented. The inflationary impulse from commodities has therefore cooled on a weekly basis, without being neutralised at the trend level.

10. Bonds and Central Banks

DOMINA Treasury Futures Rotation — Treasury Futures GRID Rotation · ZT, ZF, ZN, TN, ZB in the weak quadrant.

DOMINA Regime Sub-Indicators — VIX, credito, breadth, Put/Call e HYG/TLT — Regime Sub-Indicators · VIX 14.8 · HYG/LQD 0.75 · HYG/TLT 0.9665 · Put/Call 0.76.

Fed, US macro and BOJ: central bank moves in W38

Fed. On 16 September, the FOMC raised the target range by 25 bps to 3.75–4.00%. The SEP became more restrictive relative to June: the Fed Funds median stands at 4.1% for 2026 and 2027, and 3.9% for 2028, while the 2026 projections incorporate growth of 2.3%, unemployment of 4.1%, PCE of 3.7% and core PCE of 3.4%. The market reaction was concentrated primarily at the front end: the 2Y rose 13 bps versus +5 bps on the 10Y and −1 bp on the 30Y.

US Macro. August retail sales grew +1.2% m/m and +6.0% y/y, and new jobless claims fell to 196,000; industrial production was flat and manufacturing −0.3%, while housing starts and permits declined 2.6% and 2.7% m/m respectively. The mix therefore remains consistent with resilient demand and labour markets alongside weaker production and housing: no uniform contraction has emerged that, on its own, would be capable of neutralising the Fed's message.

BOJ. On 18 September, the Bank of Japan raised its policy rate to 1.25%, in a 7–2 vote. The initial yen reaction was, however, muted: a reminder that the direction of monetary policy and the immediate FX response do not necessarily coincide.

Challenge. A positive 1W reading for TLT should not be interpreted as a broad-based easing: the official curve instead points to a bear-flattening, and Treasury futures remain weak in the GRID. The consistent signal is one of stabilisation in long-duration while short-term funding costs are being repriced higher.

12. Transmission Channels

DriverFed +25 bps and more restrictive SEP; 2Y/5Y rising faster than the long end.

TransmissionBear-flattening + stronger USD → tighter financial conditions and greater selectivity across sectors and geographies.

ImpactQQQ/SOX/XLK supporting the indices, while RSP, small caps, breadth and many geographies are losing participation.

Confirmation / RiskCredit and VIX still orderly + stable LT WPI = tactical deterioration. A further deterioration in credit/LT WPI would transform the signal into a regime risk.

13. Risks and Catalysts

Risk / Catalyst	Transmission Channel	Signal to Monitor
Further front-end repricing	Higher 2Y/5Y → tighter financial conditions → pressure on multiples and rate-sensitive sectors.	2Y, 5Y and 2s10s spread; 10Y holding above 5%.
US equity concentration	SOX/XLK leadership with weak RSP → cap-weighted indices outperforming the average stock.	RSP vs SPY, SOX, breadth >50/200DMA, A/D and New Highs−Lows.
Stronger USD	Dollar strengthening → tighter conditions for EM and assets sensitive to global liquidity.	UUP/DXY, Country Monitor EM, FX Rotation.
Commodity inflation not fully reabsorbed	Energy, grains and metals still strong may sustain pressure on inflation expectations.	DBC 1M/3M, Energy Index, grains, precious and industrial metals.
Breadth normalisation	A recovery in market breadth would reduce the risk of excessively concentrated market exposure.	Return >50DMA above 40%, improvement in RSP and ST WPI, NH−NL balance moving toward zero/positive.

14. Focus for the Week Ahead

W39: the test is not merely the direction of the index, but the market's ability to re-broaden participation. The first checkpoint is on the Treasury front end: if 2Y/5Y yields continue to rise and the 2s10s compresses further, the constraint on multiples remains active. The second is internal to equities: RSP, breadth >50DMA, ST WPI and the New Highs−Lows balance must improve to confirm that the resilience of SPY/QQQ is not solely a function of concentration. The third is the dollar: a further strengthening of the DXY would increase pressure on EM and global rotations. On the US calendar, watch for New Residential Sales on 24 September and Advance Durable Goods on 25 September; the readings should be assessed within the context of the Fed's revised path, not treated in isolation.

15. Sources

DOMINA Trading Suite — Market Regime, Macro Asset, Global Indices, Breadth, WPI, GRID Rotation, FX, Commodities and Rates; data cut 18/09/2026.
DOMINA Weekly Intermarket W37 — Week-over-Week comparison; data cut 11/09/2026.
Federal Reserve — FOMC Statement, 16/09/2026: target range 3.75–4.00%. Source.
Federal Reserve — Summary of Economic Projections, 16/09/2026; Fed Funds path and macro projections. Source.
U.S. Department of the Treasury — Daily Treasury Par Yield Curve Rates, closing 11/09 and 18/09/2026. Source.
U.S. Census Bureau — Advance Monthly Sales for Retail and Food Services, August 2026 (+1.2% m/m; +6.0% y/y). Source.
U.S. Census Bureau — New Residential Construction, August 2026: permits −2.7% m/m; starts −2.6% m/m. Source.
Federal Reserve — Industrial Production and Capacity Utilization, August 2026: total output unchanged; manufacturing −0.3%. Source.
U.S. Department of Labor — Initial Claims, week ended 12/09/2026: 196,000. Source.
Bank of Japan — Monetary Policy Meeting, 18/09/2026. Source. The decision to raise the policy rate to 1.25% and the 7–2 vote were also verified via Reuters.
U.S. Census Bureau — W39 calendar: New Residential Sales 24/09/2026 and Advance Durable Goods 25/09/2026.