Weekend Update, August 17th, 2026

Key Takeaways Last Week

Top Moves

• U.S. equities held near records, but momentum narrowed. The S&P 500 gained 0.4% and set a record Thursday, while the Nasdaq rose 0.1% and the Dow fell -0.6%. The Russell 2000 gained 1.1%. The S&P completed its third consecutive positive week. Year to date, the Russell 2000 remained the leader at +23.6%, the Nasdaq at +15.0%, the S&P 500 at +13.7%, and the Dow at +11.8%.
• Inflation cooled. July CPI rose 0.1% month over month and 3.4% year over year, down from 3.5%. Core inflation eased to 2.5% year over year. This reduced the immediate case for another Fed hike.
• Consumer data weakened sharply. July retail and food-services sales fell 0.6%, their largest decline since May 2025. The sales decline may partly reverse tax-refund and World Cup.
• Brent oil rose 5% Monday and another 1.7% Friday, ending at $88.52. The dollar, gold and most overseas equity markets were comparatively secondary to the oil-rate story.

Key Themes

• Disinflation versus deceleration: Softer CPI and PPI are constructive, but weak payrolls, retail sales and sentiment increasingly suggest demand is losing momentum. The favorable interpretation is a soft landing; the risk interpretation is slower growth before inflation has returned to target.
• Earnings restored confidence in the AI and investment cycle. Palantir jumped after reporting 93% revenue growth and raising guidance, while Caterpillar beat expectations and cited data-center-related turbine demand. Coming into the week, S&P 500 earnings were tracking toward nearly 50% year-over-year growth, including substantial one-time investment gains.
• Oil can reverse the inflation relief. July inflation benefited from lower fuel prices, while gasoline subsequently rebounded. Geopolitical markets showed signs of headline fatigue. Investors continued following Iran, tanker attacks, and the Strait of Hormuz, but stocks reacted less violently than earlier in the conflict. The important transmission mechanism remains oil: renewed crude strength lifted inflation expectations and Treasury yields late in the week.

U.S. Stock Performance – Index and Sector Moves

Financial markets were mixed during the week ending 8/14/26.

• S&P 500: 7,785— +0.4% WTD / +13.7% YTD
• Dow Jones Industrial Average: 53,732— -0.6% WTD / +11.8% YTD
• Nasdaq Composite: 26,729 — +0.1% WTD / +15.0% YTD
• Russell 2000: 3,068 — +1.1% WTD / +23.6% YTD

Small-cap and equal-weight performance was better than the headline indexes suggested. The Russell 2000 reached record territory, while the cap-weighted S&P 500 continued setting highs despite uneven mega-cap and AI performance.

Energy was the best-performing S&P 500 sector Friday and finished stronger as crude prices recovered. Technology participation was mixed: memory stocks rallied sharply, while Cisco, Coherent, and semiconductor-equipment stocks struggled following earnings.

Energy lagged the broader rally as oil prices declined significantly during the week. The Nasdaq reclaimed its short- and intermediate-term moving averages and posted its strongest week since April, while new highs in the S&P 500 reinforced the improving technical backdrop.

Source: Seeking Alpha

Source: Seeking Alpha

S&P 500 Weekly Leaders and Laggards Ranked

Top Performers (WTD)

1. Sandisk (SNDK) +35.4% surged after management projected mid-to-high-teens revenue growth and very strong margins for fiscal 2028–2030, reinforcing the view that AI-driven NAND demand.
2. Workday (WDAY), jumped 18% Thursday after reports that Silver Lake was exploring a roughly $43 billion take-private transaction, sharply resetting valuation expectations.
3. Seagate Technology (STX) rallied with the memory/storage complex as Sandisk’s long-term guid-ance strengthened expectations for durable hyperscaler and AI-storage demand.
4. Micron Technology (MU) advanced as the memory rebound broadened, supported by Sandisk’s bullish capacity/pricing outlook and continued AI-related memory demand.
5. Super Micro Computer (SMCI) gained after strong earnings and guidance reinforced demand for AI servers and liquid-cooled data-center infrastructure.

Bottom Performers (WTD)

1. Tapestry (TPR) plunged about -16% Thursday after its revenue/profit outlook disappointed inves-tors, particularly around the Kate Spade business and discretionary demand.
2. Coherent (COHR) sold off after earnings as investors focused on margin pressure, elevated capex, and whether AI-optical demand was converting into profits fast enough to justify the prior rally.
3. Cisco Systems (CSCO) fell -8% after otherwise strong results because declining gross margins overshadowed accelerating revenue and roughly $9.3 billion of AI infrastructure orders.
4. Applied Materials (AMAT) dropped roughly -5% Friday despite beating estimates. Investors wanted a stronger increase to longer-term equipment-growth expectations.

Breadth & Participation

Market breadth remained reasonably constructive.

The Russell 2000 gained +1.1% and reached new highs while the Dow declined, suggesting that investors continued to broaden exposure outside the largest capitalization names. The equal-weight market also per-formed better than the headline cap-weighted indexes during portions of the week.

Friday’s breadth was mixed but not weak enough to signal broad liquidation: seven of the S&P 500’s 11 sec-tors advanced, and NYSE advancers outnumbered decliners even as the headline index finished lower.

Source: Seeking Alpha

International/Global

International markets were mixed as investors balanced improving U.S. inflation data against renewed Middle East tensions and weaker global consumer data. South Korea’s Kospi gained approximately 2.4% Friday, helped by renewed semiconductor and memory enthusiasm.

The U.S.–Iran peace process remained unresolved. Commercial passage through the Strait of Hormuz was still constrained. The approaching expiration of the 60-day diplomatic framework left substantial disagreement over control of the strait, sanctions, U.S. military presence, and compensation demands.

Source: Seeking Alpha

Volatility & Risk Sentiment

Index-level risk sentiment remained unusually calm despite geopolitical and single-stock volatility.

VIX: approximately 14.25, its lowest level since December.

MOVE: 68

Bonds, Credit & Interest Rates

Treasury yields ended the week elevated.

• 2-year Treasury: approximately 4.17%
• 10-year Treasury: approximately 4.695%
• 30-year Treasury: 5.25%

The 10-year yield ended around 4.695%, rising approximately 4 basis points for the week after initially falling on softer inflation. Higher oil and continued concerns about Treasury supply pushed yields higher late Friday.

Rate expectations shifted down materially after CPI and PPI. Market pricing moved toward 65%–70% probability that the Fed leaves rates unchanged in September.

Source: Seeking Alpha

Economic Data, Monetary Policy & Earnings

July CPI increased only 0.1% month over month and 3.4% year over year, down from 3.5% in June. Lower gasoline prices helped moderate the headline number. July PPI was unchanged month over month and increased 4.7% year over year. Energy prices declined 3.1%, food prices declined 0.9%, and core PPI increased 0.2% monthly and 4.2% annually.Retail sales delivered the week’s most concerning economic signal. July sales fell 0.6%, versus expectations for a modest gain. Core retail categories declined 0.4%, while online sales fell 2.2%.

The combination leaves the Federal Reserve with a more balanced problem than it faced several weeks ago:

• Inflation is moderating.
• Employment growth has weakened.
• Consumer spending is beginning to soften.
• Oil and geopolitical risks remain capable of reversing the inflation improvement.

The Fed therefore has substantially less reason to tighten immediately, but inflation above 3% makes near-term easing difficult to justify. Q2 earnings continued to provide the equity market’s strongest fundamental support. Roughly 90% of S&P 500 companies had reported by the end of the week, and aggregate earnings growth was running near 50%, the strongest pace since 2021, although unusually large gains at some companies elevated the aggregate figure.

Commodities, Currencies & Macro Assets

WTI crude: approximately $82.40/bbl — +5.4% WTD

Brent crude: approximately $88.52/bbl — +5.95% WTD

Gold: $4,400

Source: Seeking Alpha

What Matters This Week

• Wednesday: July FOMC minutes. Investors will look for how much support existed for a rate hike. The minutes predate the weak jobs, CPI, PPI and retail-sales reports.
• Retail earnings: Home Depot reports Tuesday; Target and Lowe’s Wednesday; Walmart Thursday.
• Housing and production: Tuesday brings housing starts, building permits, import prices, industrial production, capacity utilization and pending home sales.
• Thursday and Friday: Weekly jobless claims, the Philadelphia Fed survey and flash manufacturing and services PMIs for confirmation, or contradiction, of the slowdown signal.
• Brent crude and Hormuz headlines. A renewed oil surge would challenge the week’s disinflation narrative; sustained easing would support consumers, bonds and equity breadth.

Bottom Line

The market completed another positive week and reached records. Inflation improved enough to reduce immediate Fed-hike risk, which is positive for valuations. But retail sales unexpectedly fell, employment has already weakened, and consumer sentiment softened. The debate is therefore shifting from “Will inflation force the Fed to hike?” toward “How much growth is being sacrificed to bring inflation down?”

Corporate earnings remain the strongest argument for the bull market. The S&P 500 is producing exceptionally strong profit growth, and AI infrastructure continues generating large winners. Sandisk’s 35.4%

weekly gain is a powerful example. At the same time, Cisco, Coherent, Applied Materials, and other high-expectation companies demonstrate that investors are demanding more than an earnings beat. Margins, guidance, free cash flow, and the durability of AI-related demand increasingly determine the stock reaction.

Geopolitics remain the principal wildcard. Oil’s nearly 6% weekly rebound shows that the Iran/Hormuz conflict can quickly reverse the inflation narrative even when domestic inflation data are improving.

Stock Talk

Something Just Changed in the Market. Why 1998-1999 Might be a Relevant Analogy Still.

 

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.