In his latest Global Market Intelligence note, "August Checklist1,” Citadel Securities' Scott Rubner frames the prevailing investor anxiety as a misread of what is actually happening beneath the surface. The S&P 500 has posted 26 all-time highs in 2026 against a backdrop of persistent macro worry. Most inbound questions, Rubner notes, still centre on what can go wrong. His note pivots the conversation. "For August," he writes, "I think there is a more interesting one: Who becomes a buyer higher?" The answer, he argues, is that the list of buyers is getting longer.
Earnings Are Doing the Heavy Lifting
The fundamental anchor of Rubner's case is earnings. Q2 S&P 500 EPS growth is tracking near 33%, the strongest outside of post-recession recoveries, and the revision path is the steepest since at least 2000. Critically, this is not simply an AI-sector story. "Earnings are better than expected," Rubner states plainly, "and by a wide margin."
The valuation picture reinforces rather than undermines this. The S&P 500 is making all-time highs while its forward P/E has compressed from roughly 23.1x last October to approximately 20.1x today. The equal-weight S&P trades at around 17.1x. "Earnings estimates are rising faster than prices," Rubner notes. This is a fundamentally different setup from 1999. Multiples are not doing the work; earnings are.
The Leverage Reset Has Run Its Course
The mechanical selling overhang that weighed on markets earlier in the year is largely exhausted. The global leverage reset looks increasingly mature, positioning has reset, and the rules-based selling pressure is smaller. Rubner identifies a directional shift: "The next meaningful mechanical flow may be releveraging rather than deleveraging." As realized volatility windows continue to reset lower, systematic strategies rebuild the capacity to add exposure. The asymmetry of flows, in other words, is changing.
Retail Is Back, But Still Cautious
Retail returned as a net buyer across Citadel's platform, reversing the selling seen at the end of June. The distinction Rubner draws here is important. Participation has returned, but conviction has not fully followed. Options data tells the more nuanced story. Broad-based ETF put premium averaged approximately $29 million per day this month, roughly 8x the one-year average. "Retail is buying the market again, but it is still paying for protection." That hedged posture is meaningful: "Markets can move quickly from caution to participation, and from participation to chasing."
Passive Flows and the Corporate Bid
Passive demand never left. Household ETF inflows have reached approximately $1.6 trillion year-to-date, roughly $7.5 billion per day, beating the previous record pace by 55%. July alone saw nearly $350 billion of inflows, the largest monthly total on record. Into this structural bid, more than $1 trillion of corporate buyback authorizations re-enters execution this week. Nearly 70% of the largest authorized buybacks year-to-date are outside Technology. "The corporate bid is coming back, and it should increasingly reach the average stock."
Index Construction and the Resilience Paradox
Rubner raises one of the most practically important points in the note. "SPX is not the average stock." On days when the Philadelphia Semiconductor Index has fallen more than 3% this year, the S&P 500 declined only 0.8% on average, versus 2.4% over the prior 20 years. Software has been positive on average on those same days. Index construction, concentration, and where passive capital flows all moderate outcomes at the headline level that feel extreme underneath. "You can have a brutal market underneath the hood and a resilient headline index at the same time. Both can be true."
Breadth, Volatility, and the Right Tail
More than 70% of S&P 500 constituents are above their 200-day moving averages, the strongest breadth since December 2024. Three-month realized correlations are near all-time lows. That combination is expanding the opportunity set for single-stock selection. Meanwhile, volatility is transitioning from output to input. "Lower volatility is no longer just describing the market. It is beginning to change the flow math." Implied volatility across the ten largest semiconductor constituents has fallen nearly 20 points this month.
Options market positioning captures the psychology shift most vividly. August 4 was the most active day for SPX calls on record. "The five sessions from July 30 through August 5 also marked the largest five-day period of SPX call volume in history." One-month and three-month skews are at their flattest levels since January 2025. Nearly 35% of S&P 500 members are now trading with inverted three-month call skew, the highest share on record. Investors are no longer simply paying less for downside; in parts of the market, they are paying more for upside convexity.
The September Qualifier
Rubner closes with an important caveat. "September may be a different conversation." Seasonality gets harder, positioning may be fuller, and if August turns into a chase, some of today's buying capacity will already have been deployed. The flow logic that favours August is precisely the logic that complicates September.
Five Key Takeaways for Advisors and Investors
1 Earnings quality matters more than index levels. Multiple compression alongside all-time highs signals that fundamental earnings growth is driving prices, not speculative expansion. This is a more durable setup than valuation-led rallies.
2 The shift from deleveraging to releveraging is underway. With the systematic selling overhang mostly exhausted, the next large mechanical flow is likely additive rather than subtractive. Volatility reduction is a catalyst for that process.
3 Retail participation is re-emerging, but hedging costs remain elevated. The combination of renewed buying and elevated put protection suggests investors are not yet fully committed. That gap between participation and conviction is where the next upside move is made or missed.
4 Breadth expansion and low correlation create conditions for active management. When most names are rising independently of each other, stock selection generates alpha. The current dispersion environment rewards managers who can identify individual drivers rather than riding index exposure.
5 August's buyer dynamics do not automatically extend into September. Today's incremental buyers are deploying capital that will not be available a month from now. Positioning, seasonality, and the velocity of the recovery matter for assessing how much runway remains.
Footnote:
Rubner, Scott. "August Checklist." Citadel Securities Global Market Intelligence, 11 Aug. 2026, https://www.citadelsecurities.com/news-and-insights/global-market-intelligence/august-checklist/.
