Weekly Market Update for August 14, 2026

by Jared Plotz, Director of Research

Stocks traded in a narrow range for much of the week, but the S&P 500 (large companies) and Russell 2000 (small companies) indices still reached fresh record closes on Thursday. The S&P 500 finished the week up +0.4%, while the Nasdaq rose +0.1%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.69%, +5 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, closed at 3.91%, down 1 bp from last week.

Inflation data provided some relief, albeit far from settling the interest-rate debate. July core Consumer Price Index (CPI) inflation was in line with expectations, while core Producer Price Index (PPI) inflation came in slightly cooler than forecast. The reports lowered the probability of a September interest-rate hike, but Federal Reserve officials continued to remain cautious. Cleveland Fed President Hammack argued that policymakers need to act now to prevent the economy from overheating, while Richmond Fed President Barkin said it remains an open question whether a hike will be necessary to return inflation to the Fed’s 2% target.

Within the artificial intelligence industry theme, CoreWeave, Nebius, Super Micro Computer and Lumentum delivered results that reinforced robust demand for AI computing capacity, networking equipment and optical components. AI-cloud provider CoreWeave reported that backlog (contracts signed, yet to be fulfilled) had climbed to more than $104 billion, while competitor Nebius highlighted improving project economics and a shorter payback period for new capacity. As the AI buildout remains powerful, it also comes with volatility in the shares of those companies standing to benefit – something we highlighted in our recent quarterly letter.

The situation in Iran continues to influence energy markets, although the broader stock market remained relatively calm. Oil prices jumped early in the week after Iran said a potential agreement with Oman would not fully reopen the Strait of Hormuz, then gave back part of those gains as diplomacy remained the base case and large-scale hostilities stayed muted. The push and pull between constrained shipping, elevated energy prices and the possibility of a negotiated reopening remains an important inflation risk, particularly as strategic oil reserves and stockpiles at refineries continue to decline.

Data released on Friday offered a softer read on the consumer. July retail sales unexpectedly declined, while preliminary University of Michigan consumer sentiment missed expectations and one-year inflation expectations moved higher. The results do not establish a new trend, especially after the timing of Prime Day and normal seasonal effects. They do add another data point to the mixed economic picture: inflation is easing at the margin, the labor market has softened, and household demand may be losing some momentum even as equity indices remain near record highs.

Next week’s calendar shifts toward housing, industrial activity, and the consumer. Building permits, housing starts, industrial production and pending home sales are due for release on Tuesday, followed by the July Federal Open Market Committee minutes on Wednesday. Earnings season also turns toward retail, with Home Depot (HD), Lowe’s (LOW), Target (TGT), TJX Companies (TJX), Walmart (WMT) and Ross Stores (ROST) among the notable reporters.