Dominant narrative cycle components estimated from full sentiment history (Aug 2022–May 2026). Toggle series to explore co-movement patterns.

The 183-day dominant cycle and the 57-day FEAR oscillation are the primary periodic inputs to the M7 ensemble cone. When the current trading day falls near a 183-day trough AND FEAR is above its expanding mean, the IUVO™ EWI AMBER+ probability increases and the cone widens. The GEO composite (229-day dominant) contributes to cone width via the Jeffreys multiplier when geo_shock > 1.0. INFLATION's short 10–29 day cycle operates independently and primarily affects the ±1σ band.

Impulse response functions estimated from VAR(5) model on dominant narrative episodes. Active topics (above 70th percentile) are highlighted. Click a topic to see the estimated S&P 500 response to a 1-unit narrative shock.

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Geopolitical Posture (sourced)

Oil WTI fell below $70 per barrel this week — down approximately $25 from a month prior and over $40 from the 2026 peak — as the US-Iran peace framework advanced toward a signing expected Friday in Switzerland. The Hormuz blockade is easing but not yet fully lifted; the core US demand (Iran nuclear program) remains formally unresolved. The IRAN_STRIKE narrative remains active at z=1.18, consistent with ongoing headline coverage. GEO_REGIME flag is not triggered (geo_shock=0.58, below the 1.0 threshold). Governance Log 13c framing: describe as easing but not resolved until analyst confirms full Hormuz clearance. The IRF estimates a cumulative −0.40 pt S&P response to a 1-unit IRAN_STRIKE shock over 20 days — downside pressure from residual geo uncertainty.

Market Framing & M7 Interpretation (sourced)

The week's dominant macro event was the June FOMC under Chair Kevin Warsh — his first meeting. The Committee voted 12-0 to hold rates at 3.50–3.75%, but updated projections showed no rate cuts in 2026 and nine of 18 officials penciling in at least one hike. Warsh removed forward guidance entirely, framing the stance as a "procedural reset" committed to price stability. PCE inflation: 4.1% YoY (core 3.4%), energy contributing 1.5 percentage points. Governance Log 13d: Warsh-era framing active — higher-for-longer confirmed at first meeting; monitor FEDERAL_RESERVE narrative column for spike as Warsh statements generate headline volume. The S&P fell −1.2% for the week with technology leading the decline. However, breadth improved: 63% of S&P stocks traded above their 50-day moving average by Thursday. Micron's +17.9% earnings beat signaled AI infrastructure spend remains intact. M7 reads this environment as mild-positive: consensus LONG at 60% strength, ECT z=+0.96 (below 1.0 widening threshold), WoE = +2.3 dB.

Model-Detected Items [model detected]

• IRAN_STRIKE z=1.18 — active above 70th pct. Dominant episode: Mar 2026 bombing. IRF: peak response day 2 (−0.18 pts), 3-day half-life, cumulative −0.40 pts at h=20.
• FEDERAL_RESERVE z=−0.72 — inactive in model but Warsh policy pivot is the week's primary macro narrative. Expect FEDERAL_RESERVE column to spike next week as Warsh-era commentary continues. [Governance Log 13d: monitor for elevation above p70]
• PC-1 regime stationarity WARN remains active — KS test confirmed current distribution outside training norms. Directional hit rate improved post-break (PERFORMANCE_IMPROVEMENT_STRUCTURAL INFO). Widen subjective uncertainty bands.
• STRUCTURAL_BREAK_ECT WARN active: intercept shift confirmed at 2025-01-20. M2B subsample ECT addresses level shift. Directional signal valid — see structural regime note below.

Risk Scenarios

Upside (primary):	Iran deal signed → oil sustains below $70 → energy CPI contribution fades → disinflation path emerges through H2 2026. Micron/AI demand broadens. Breadth rotation continues.
Downside (primary):	Warsh signals rate hike path — 9 of 18 officials already penciled in. PCE above target; consumer sentiment near historic lows (48.9). Tech selloff extends beyond rotation into structural pressure.
Emerging watch:	Iran deal final signing this week; Q2 earnings season begins; jobs data next week; whether OpenAI IPO delay signals broader tech funding risk. FEDERAL_RESERVE column — watch for spike above p70.
Asymmetry:	LEFT-SKEWED — hawkish Fed is proximate downside risk; Iran/oil disinflation is primary upside catalyst. NAF at +2.1% partially offsets the left-skew at the narrative level.

Structural Regime Note (Check 6B — active): The Chow test confirmed a structural break in the long-run cointegrating relationship between PC-1 and the S&P 500 at the January 2025 political regime change date. The break is an intercept shift — the equilibrium level re-anchored — not a collapse of the directional narrative-price relationship. M2B's subsample error-correction model addresses the level shift. Directional hit rate improved post-break (PERFORMANCE_IMPROVEMENT_STRUCTURAL INFO), confirming the narrative signal remains valid. The higher-for-longer Fed posture under Warsh represents a post-break regime characteristic: rate-cut optionality reduced from the initial Warsh interpretation; monitor whether FEDERAL_RESERVE narrative loadings shift the PC-1 equilibrium level further.