Let's look at yesterday's US stock results first. SPY rose 1.68% on the day, and was up 0.48% over the past 5 trading days; QQQ rose 3.30% on the day, but was still down 1.22% over the past 5 trading days. In short, the indices were strongly lifted by tech stocks last night, but the divergence over the past week has not been fully repaired. ETF Radar is watching two threads today: "higher-for-longer interest rates" and "the divergence behind the tech rebound."

Start with the main thread. The most important background yesterday was not any single company's earnings, but that the market is re-digesting the idea that "the Federal Reserve may not loosen policy so quickly." In the M section, the theme of the Federal Reserve's 2026 rate cycle is the hottest, with the number of related events reaching 6.2 times normal. In accompanying commentary, Fidelity noted the Fed may not start to act until December, and September cannot be completely ruled out. Put bluntly, the market had been hoping for cheaper money, and now realizes borrowing costs may have to stay elevated for a while longer.

There is also a layer of data supporting this. The US GDP report was interpreted as "underlying demand is strong." Put simply, consumers and businesses are spending and investing with more gusto than many expected. With the economy not obviously cooling, the Fed is naturally less eager to loosen. If it loosens too early, inflation could re-accelerate. The transmission chain is actually simple: demand strong → inflation not easy to bring down → Fed unwilling to cut rates quickly, may even keep the door open for tighter policy → long-end rates, i.e., long-term borrowing costs, are likely to be held up.

At the same time, tech stocks provided a strong short-term stimulus to the market. Microsoft beat expectations, with cloud growth the fastest in four years. That news directly drove the Nasdaq strongly last night, with QQQ jumping 3.30% on the day. But there is an easy-to-miss point here: a big one-day rebound does not mean the medium-term pressure across the whole tech chain is gone. The market is facing two opposing forces. On one side, big-company earnings are decent and the AI spending story continues; on the other side, if rates remain high, future profits get discounted more harshly. Put simply, much of growth stocks' value comes from "making more money in the future," and the higher the rates, the steeper the discount applied to that "future money."

Look next at the Asia supply-chain thread. Reports out of South Korea suggest consideration of loosening labor rules for new semiconductor industrial clusters, even discussing removing the 52-hour weekly work limit. That news itself is not an outright negative or positive for global chips, but it indicates one thing: the East Asian semiconductor supply chain is accelerating the fight for capacity and efficiency. In plain terms, everyone wants fabs, packaging plants, and supporting factories to run faster. Such moves may lift sentiment in the short term, but they also increase supply-side competition, forcing the market to rethink who will win future orders and who might be dragged down by price wars.

Meanwhile, IATA data gave a somewhat cold dose of reality. Global air passenger demand in June fell 1.7% year-on-year, and excluding the Middle East it fell 0.6%; domestic demand dropped 3%. This shows that global travel momentum is not just continuously surging. Put simply, people are willing to fly, but not with the strength previously assumed. This data is important because it does not fully align with "an overheated economy." In other words, the market is not seeing a single conclusion, but rather "US demand strong, mega-cap tech strong, but some parts of global real activity are not that hot." That is why last night we saw "tech up, bonds weak, and cyclical signals inconsistent."

Add one fresh China policy thread. The CPC Central Politburo meeting mentioned stabilizing the real estate market, advancing reforms of local small and medium financial institutions to defuse risks, and emphasized deepening comprehensive reforms of capital market financing and investment to boost capital market resilience and confidence. Put simply, the aim is to stabilize the property market and financial risks on one hand, and to smooth the financing and investment environment of the stock market on the other. At the same time, nine departments issued guidance to strengthen the development and use of tech-finance data, meaning financial institutions should find it easier to understand technology companies' data and reduce information asymmetry. To put it another way, banks and investors will no longer be walking in the dark when evaluating tech firms, but will have a clearer map. These policies are more medium-term and may not show up immediately in US stocks, but they are a positive for sentiment on Chinese assets.

However, there is a real "countercurrent." Yesterday's big rally in US stocks can make it feel like risk appetite is fully back, but IATA's weak demand figures show global real activity did not accelerate in sync; and the high-rate storyline has not disappeared. So it looks more like "hot pockets amid broader divergence," not a uniform upward move across all sectors.

Now on to ETFs. First TLT, the long-term US Treasury ETF. TLT fell 0.44% over the past 5 trading days. ETF Radar's model is biased negative on TLT for the next 1 to 3 months, with fairly consistent signals. The reason is not a day or two of price action, but several independent data sets pointing the same way. First, CFTC net positions are -391,386 contracts. Put simply, large players in futures are net short after subtracting longs from shorts, and the bias is clearly toward shorting. Second, since 7/23, TLT has had real redemption net outflows of -$320M, i.e., -0.77% AUM. Put simply, real money is leaving, not just verbal bearishness. Third, on the options side call IV is 11.16% and put IV is 11.87%, with IV historical percentile at 89%. Put simply, implied volatility is the market's "insurance price" for future swings, and puts—i.e., downside protection—are more expensive than calls, showing the market is willing to pay to guard against declines. Add a 10-year Treasury yield of 4.67%—long rates are already high—so the "duration under pressure" chain for TLT remains. Duration can be understood as sensitivity to rate changes: when rates rise, price is easily pressured.

Second, TIP, the inflation-protected bond ETF. TIP rose 0.23% over the past 5 trading days. Looking ahead, ETF Radar is biased negative on TIP for the next 1 to 3 months, with focused evidence. Here there is a divergence: a small weekly price gain, but the model is looking at the coming 1 to 3 months and that has not yet materialized. The quantitative evidence has three parts. First, the 10-year nominal rate is about 4.67%, the 10-year real rate about 2.41%, and the 10-year breakeven inflation about 2.27%. Put simply, the real rate—what you actually get after subtracting inflation—is not low, which will weigh on bond prices. Second, the prediction market's probability of further tightening in 2026 is about 0.66. Put simply, the market still assigns a nontrivial probability to being "a bit tighter." Third, since 7/23 TIP's net subscriptions/redemptions are +$21M, i.e., +0.15% AUM, but the 30-day cumulative flow is -0.08% AUM. Put simply, there has been some short-term inflow, but month-to-date funds have not meaningfully strengthened. So this fund's lack of a sharp short-term decline does not mean medium-term pressure is gone.

Third, SOXX. SOXX fell 8.47% over the past 5 trading days and 15.87% over the past month, but it jumped 8.50% on the day yesterday. ETF Radar's model is biased positive on SOXX for the next 1 to 3 months, though the signal is moderate. I should be frank: this view diverges from today's "high-rate main thread." In the news, Microsoft's earnings lifted tech sentiment; on the system side, semiconductors flipped from slightly negative yesterday to slightly positive today, mainly not because of one-day strength but because of clear fund flows returning. Although the Q segment mainly provides SMH, it is in the same chip category and is a useful reference: since 7/23 SMH real net inflows are +$2,670M, i.e., +4.21% AUM, and 30-day cumulative net inflows are +6.44% AUM. Put simply, big money is returning to the chip sector. Coupled with DDR5 16Gb spot prices +1.08%, this indicates some storage demand has not collapsed. But note that SOXX was still down sharply over the past week, indicating high volatility; hot news but a medium-term system stance—this divergence itself is a signal.

Fourth, VDE, the energy ETF. This one is not directly tied to today's main thread and represents a system-independent medium-term stance. VDE fell 1.12% over the past 5 trading days, but rose 9.34% over the past month. ETF Radar's model is biased positive on VDE for the next 1 to 3 months, with fairly consistent signals. The evidence is also clear. First, CFTC crude net long positions are about 63,979 contracts. Put simply, large players' net long positions in crude futures, after subtracting shorts, stand at that level. Second, near-month WTI is 83.93 versus 12-month WTI at 70.20, so the futures curve is clearly in backwardation with a slope of 19.558%. Put simply, the near-month price is much higher than the far month—like "spot is more in demand"—which usually indicates short-term supply tightness. Third, OVX is 67.59, z=+0.74. Put simply, OVX is the volatility index for oil, like the oil market's "tension thermometer"—it is elevated but not in full panic. So even if VDE has pulled back in recent days, the medium-term readings remain biased positive.

Putting the news together today, the summary is: strong US demand and mega-cap tech earnings pushed risk sentiment up; but the big stone of high rates still presses on bonds and parts of growth valuations, and global real activity has not fully re-accelerated, so the market looks more like a "divergent rebound," not an indiscriminate tailwind. Reminder: the above are system quantitative model directional forecasts for the general market and do not constitute investment advice tailored to you; consult a licensed investment advisor before investing.