Market Commentary
for the week ending 8/14/2026

The U.S. stock market indices ended with mixed results last week, as the S&P 500 and Nasdaq logged small gains, while the Dow Jones Industrial Average dipped slightly.

The S&P 500 index closed at a new all-time high of 7,800 on Thursday and logged its third straight weekly gain. Cooling inflation data, disappointing retail sales data, mixed news on the conflicts in the Middle East, and rather strong earnings from some smaller artificial intelligence related companies led market movements. These combined forces helped equities edge slightly higher for the most part, after a solid rally the prior week.

Key Economic and Investment Highlights included:

Cooling Macro Inflation Data: Crucial economic data provided some much-needed relief to investors. July’s Consumer Price Index (CPI) data showed headline CPI inflation easing to 3.4% year-over-year, aligning perfectly with consensus forecasts. Core CPI (excluding food and energy) also cooled slightly to 2.5% year-over-year and was in-line with estimates. Further bolstering market sentiment, both the headline and core numbers for the Producer Price Index (PPI) came in below Wall Street’s expectations, and down from June’s levels.

Federal Reserve Rate-Hike Concerns Dissipate: The benign inflation readouts significantly reduced investor fears of an imminent rate hike from the Federal Reserve. According to CME FedWatch data, traders are now pricing in only a 33% probability that the central bank will raise the federal funds rate during the upcoming September meeting, contrasting Wall Street’s speculation from a week ago, that had predicted a 55% chance of a rate hike. With inflation calming down and the jobs market strong enough there is likely less reason to raise interest rates for the time being.

Iran-related headlines lowered chances of an agreement: There has been an apparent shift in the Trump administration’s stance on dealing with Iran. They now appear to prefer focusing on using economic tactics to pressure Iran into a deal, rather than more strikes. However, this week Iran hardened its terms for reopening the Strait of Hormuz, complicating the chances of any diplomatic settlement anytime soon. Crude oil prices began the week by spiking to a high of about $84.50, reflecting increased doubts of the reopening of the Strait. Then oil dipped some on Thursday, following a downgrade of 2026 demand projections from both OPEC and the International Energy Agency (IEA), coupled with a substantial surge in domestic commercial oil inventories, alleviating fears of energy-driven inflation, despite the lingering US-Iran deadlock.

AI Demand Rekindles Tech Volatility: The structural artificial intelligence thesis reasserted its dominance in recent weeks. Cloud infrastructure player CoreWeave and server manufacturer Super Micro Computer both posted massive sales expansions, cementing confidence in the longevity of corporate capital expenditure budgets. Cisco Systems reported an impressive quarter and raised guidance. Despite its outlook for substantial growth in the next fiscal year, shares were lower Thursday reflecting elevated expectations and slight pressure on margins.

Retail Sales Data Disappointed: Markets dipped on Friday following the release of July’s retail sales, which showed sales had declined 0.6% since June, well below expectations for a 0.1% increase in retail sales. Bank of America suggested that the July weakness was likely a one-off, while the resilient consumer and low unemployment still supported retail spending in the coming months. While this data point was disappointing for the economy, it also lowered the pressure on the Fed to consider a rate hike in September.

This week Wall Street will focus on a fresh slate of earnings reports for some of the largest retailers including Walmart, Target, Home Depot and Lowe’s.

For the week, the Dow dipped -0.6% to 53,732. The S&P 500 edged up 0.4% to 7,786, and Nasdaq nudged up 0.1% to 26,729.
Oil rose 6.9% to $82.40/bbl. Gold inched up 0.7% to $4,432/oz. and the yield on the Ten-Year Treasury closed slightly ahead to 4.7%.

 

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