Weekly Market Update for August 7, 2026

by Gavyn Jensen-Schneider, Research Associate

The dog days of summer may be over as market indices rallied to fresh record highs. The S&P 500 finished the week up +2.07%, while the Nasdaq rose +3.00%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.64%, down -7 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, fell -2 bps to 3.92%.

A total of 88% of S&P 500 companies have reported their earnings for the quarter, with primarily positive results. Specifically, 86% of companies beat Wall Street EPS estimates, and 76% have topped consensus revenue estimates. Blended earnings growth for the quarter is currently 54%, which—if this trend holds—would be the highest growth rate since 2021, when the economy rebounded after the COVID-19 recession.

While the stock market trends upward, the labor market seems to be losing its stable footing. July nonfarm payrolls were 107,000 behind Wall Street expectations, coming in at -23,000. Job losses in government were the largest contributor to the subpar labor report, accounting for a loss of 50,000 jobs. Stripping out public sector employment, private payrolls rose 30,000 in July. Even with the negative net new jobs last month, the unemployment rate fell 10 bps to 4.1%. Just like last month, the decline in unemployment has more to do with falling labor force participation, which has been moving lower throughout 2026.

Progress is reportedly being made to reopen the Strait of Hormuz and unclog shipping in the Middle East. Iran and Oman, the countries on either side of the Strait, are in the final stages of negotiating an agreement to manage commercial shipping through Hormuz. Official details have yet to be released, but current reporting suggests that: inbound cargo would transit through a northern (Iranian) corridor while outbound traffic would leave via a southern (Omani) corridor; vessels from nations “hostile” to Iran would have to pay compensation for damages accrued in the conflict; US and Israeli ships would be banned from using the Strait entirely; and a transit fee ranging from 3% to 7% would be charged on all commercial cargo. While any movement toward reopening the Strait would be an improvement over the current trade gridlock in the region, the outlined deal would have long-lasting ramifications for global trade, making it a step down from the unrestricted international transit enjoyed before the onset of the Iran conflict.

Inflation data headlines next week’s calendar, with the July Consumer Price Index (CPI) out Wednesday. Earnings season enters its fifth week with a slowdown in reports. Highlighting the conference call list are neocloud provider CoreWeave (CRWV), as well as AI enablers Super Micro Computer (SMCI) and Applied Materials (AMAT).