{"id":30196,"date":"2026-07-03T23:04:49","date_gmt":"2026-07-03T23:04:49","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=30196"},"modified":"2026-07-03T23:04:51","modified_gmt":"2026-07-03T23:04:51","slug":"the-quarter-of-divergence-equities-q3-2026-outlook","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/quarterly-forecast\/the-quarter-of-divergence-equities-q3-2026-outlook\/","title":{"rendered":"The Quarter of Divergence. Equities Q3 2026 Outlook"},"content":{"rendered":"\n

Five major equity indices enter the third quarter reading five different structures. What ties them together is not a shared direction but a shared tension: earnings that keep beating, an AI capex cycle funding them, and a Fed leaning against the whole thing. Below, the chart leads and the macro confirms \u2014 because in every case, the structure was leaning before the headlines crossed.<\/em><\/p>\n\n\n\n

The story of this market is that it keeps doing more than it is supposed to.<\/p>\n\n\n\n

For seven straight quarters, S&P 500 earnings have beaten what analysts penciled in \u2014 not by rounding errors, but quarter after quarter, by real margins. Wall Street sets the bar; corporate America clears it. Q2 2026 is expected to land near 23% year-on-year earnings growth, a second straight quarter above 20%, and if the pattern holds, even that is probably light.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Underneath the beats sits one engine doing most of the work. The four largest hyperscalers \u2014 Microsoft, Amazon, Google and Meta \u2014 spent a combined $410 billion on capacity last year and have guided that toward $725 billion this year, on the way to a trillion-plus. That is the AI capital-expenditure cycle in a single line, and it is the structural reason earnings keep beating and indices keep grinding higher.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Against all of it stands the Fed. The policy rate has eased to a 3.62% midpoint, but in June the committee’s own projections turned the other way \u2014 the median 2026 dot moved up to 3.80%, the easing signal gone, cuts pushed out to 2027. So the quarter sets up as a three-way tension: earnings that keep outperforming, a capex cycle funding them, and a central bank leaning against the whole thing. Five index charts are each carrying that tension in a different shape.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
\n\n\n\n

S&P 500 (SPX)<\/strong><\/h3>\n\n\n\n

WEEKLY STRUCTURE \u00b7 BIAS: BOUNCE, THEN HIGHER<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

SPX enters the quarter in the upper half of a broad ascending channel that has carried the whole advance off the 2025 lows, trading around 7,499 after tagging the channel top in early June and easing back. The level that matters sits just beneath: the anchored VWAP from the April low has climbed the entire rally and now curls in around 7,259, flattening right under price. That is where the structure firms \u2014 rising channel mid-line and anchored VWAP converging into one support shelf.<\/p>\n\n\n\n

The read: a bounce off the anchored VWAP completes a zigzag (ABC) correction, and the index turns higher into the back half of the quarter. The fundamental permission for that move is the more nuanced reading of the Fed. The June dot plot was hawkish on its face, but Warsh personally declined to submit a dot, has signalled he looks through supply-shock inflation, and views AI as structurally disinflationary \u2014 all while dismantling the forward-guidance apparatus itself.<\/p>\n\n\n\n

In other words: the hawkishness is real but temporary in character, while the structural shift toward a less-hawkish, less-guided Fed is the more durable signal. The chart was leaning into the VWAP before that interpretation took hold; the macro simply gives the bounce somewhere to go.<\/p>\n\n\n\n