Is the US stock market flashing bullish signals? Citadel: 9 of 10 key indicators turn green, 'one metric' remains critical variable

Despite recent weakness in artificial intelligence (AI)-related stocks, the equity market continues to emit multiple bullish signals. Market maker Citadel Securities notes that many of the headwinds previously expected to pressure markets in the second half of 2026 have either weakened or fully reversed. However, corporate earnings remain the only significant uncertainty.

According to a report by Business Insider, Scott Rubner, strategist at Citadel Securities, stated that nine out of ten core indicators tracked by his team have shown clear improvement over the past two weeks.

"The overall checklist has almost entirely turned green," he said. "The only factor still under scrutiny—and the market's primary debate—is corporate earnings."

The ten signals monitored by Citadel Securities fall into four main categories: retail investor behavior, technical positioning, market leadership structure, and corporate earnings and fundamentals.

Rubner pointed out that many concerns previously on the team's radar have now evolved in a favorable direction for the market, indicating a gradually more optimistic sentiment.

For example, retail investor flows had briefly turned net sellers due to volatility triggered by geopolitical tensions involving Iran. However, Rubner noted that retail investors have now re-emerged as one of the strongest structural buying forces in the US equity market.

"Since July, our retail cash equity trading platform has not recorded a single net selling day," he added. According to Rubner, retail inflows this month are above seasonal averages, with daily net buying averaging about 3.2 times the historical monthly average.

Rubner also highlighted increasing stock divergence and broadening leadership as key market features. Despite recent weakness in many tech stocks, the S&P 500 continues to rise, suggesting the rally is no longer solely dependent on a few large-cap tech names.

Nevertheless, he emphasized that corporate earnings remain the biggest variable. The key question is whether Q2 earnings can meet the significantly raised market expectations.

Rubner noted that the market currently expects S&P 500 companies to report year-over-year EPS growth of 22.4% for Q2. If realized, this would be one of the strongest earnings growth rates on record outside of post-recession recovery periods.

He added that while market valuations have moderated from earlier highs, earnings expectations continue to be revised upward—a trend延续 from before Q1 earnings were released.

Rubner described the final week of July as the "Super Bowl" of the Q2 earnings season, with several major companies—including four of the "Magnificent Seven" tech giants—scheduled to report.

Although Wall Street institutions, including Bank of America, are broadly optimistic about this earnings season, Rubner believes earnings remain the last major untested hurdle for the market.

He also identified semiconductor stocks as a key focus area. With earnings reports for related companies spread across several weeks, the risk will not be concentrated in a single week but will extend throughout July and August.