Weekend Update, August 24th, 2026

August 24, 2026

A Treasury bond shock ended the S&P 500 and Nasdaq’s three-week winning streaks, but low volatility and earnings kept the move lower contained versus a broad risk-off decline.

Key Takeaways Last Week

U.S. stocks retreated from record territory. The S&P 500 fell -1.44%, the Nasdaq Composite lost -2.17%, the Dow declined -0.92%, and the Russell 2000 fell -1.73%. Year to date, the prior indexes have gained 12.10%, 12.50%, 10.77%, and 21.49%, respectively.

Interest Rates and oil drove the tape. The 10-year Treasury finished near 4.74% and the 30-year near 5.27% after an unusually volatile week centered Treasury intervention.
Rotation was sharp. Health care (+4.32%), materials (+2.28%), and energy (+2.58%) rose while information technology (-3.35%), industrials (-3.31%), and utilities (-3.04%) declined.
The economic message stayed mixed. August composite PMI accelerated to 56.0, and jobless claims fell to 206,000, while July housing starts dropped -12.4%. The consumer remains mixed as Walmart reported its slowest U.S. comparable-sales growth in more than six years.
It’s a material world. Bloomberg data showed oil +5.62%, gold +5.56%, and silver +7.49%; the dollar index fell about 0.9%, and bitcoin rose from below $63,000 to above $77,00.
This week. July PCE, a Q2 GDP revision, durable goods, Nvidia earnings, and Fed Chair Kevin Warsh’s Jackson Hole keynote all arrive between Wednesday and Friday.

Sources: LPL, AP, Kiplinger

U.S. Stock Performance – Index and Sector Moves

Source: Seeking Alpha

The week reversed the prior leadership pattern: the Nasdaq underperformed the Dow by 125 basis points as higher interest rates hit long-duration growth. Small caps also lagged.

S&P 500 Sector Scoreboard

Sources: LPL

Top and Bottom S&P 500 Movers

Source: Trefis

Moderna’s outsized gain followed positive late-stage personalized cancer-vaccine data with Merck. Crypto-linked Coinbase benefited from bitcoin’s surge; commodity names tracked higher energy prices.

Source: StatMuse

Breadth & Participation

Source: Seeking Alpha

Eight of 11 S&P 500 sectors declined. Rotation and weaker participation, not wholesale liquidation.

Small caps underperformed: Russell 2000 -1.73% versus S&P 500 -1.44%. However, the Russell remains the best major U.S. index year to date at +21.49%.

Friday breadth improved, but one strong session did not reverse the weekly deterioration.

Sources: LPL

International / Global

Source: Seeking Alpha

Developed markets were softer while emerging markets held up: MSCI EAFE fell -0.36% for the week and remained +12.73% YTD; MSCI Emerging Markets gained +0.88% and was +22.82% YTD. Japan was among the weakest major markets as government-bond yields led the global tech selloff, while South Korea produced a sharp late-week rebound led by memory names, Samsung Electronics and SK Hynix.

The pressure was interest rate-sensitive, but emerging markets were resilient.

Sources: LPL, AP

Volatility & Risk Sentiment

VIX closed at 15.13. Options markets are not pricing in near-term stress events until post 3q26.
Credit was more cautious on massive AI debt issuance. Bberg U.S. High Yield returned -0.18%, while broad investment-grade credit was flat. The signal is duration/fiscal stress first.

Sources: LPL, AP

Bonds, Credit & Interest Rates

Treasury’s surprise decision to at least double its 10-to-30-year liquidity-support buybacks to $4 billion per operation, beginning September 9, briefly pulled the 10-year yield toward 4.64%. Most of that rally reversed by Thursday. That failure to hold the move shows the market wants compensation for supply and fiscal uncertainty even with official, yet small, liquidity support.

Sources: LPL, AP, U.S. Treasury, Federal Home Loan Bank of New York

Economic Data, Monetary Policy & Earnings

Fed minutes: officials voted 9-3 in July to hold the target range at 3.50%-3.75%. “Many” judged tighter policy would likely be needed if inflation did not decline.

Fed moves: a September hold remained the base case with odds of a September hike near 30%.

Growth: Slowing but August flash U.S. composite PMI rose to 56.0 from 54.5, the fastest output growth in 52 months. Initial jobless claims fell 6,000 to 206,000, consistent with low layoffs.

Housing recession: July starts fell -12.4% to a 1.239 million annualized rate; single-family starts fell 9.9%. Permits rose 5.0% to 1.443 million.

Earnings boom: FactSet’s August 7th report showed, 88% of the S&P 500 reported, blended Q2 earnings growth was 50.4%, but fell to 32.0% excluding Alphabet and Amazon.

Sources: Federal Reserve, U.S. Census Bureau, U.S. Labor Department, FactSet

Consumer Stress Commentary

Walmart supplied the clearest caution flag. U.S. comparable sales excluding fuel rose 2.6%, below expectations and the slowest pace in more than six years. The company raised its full-year outlook.

Off-price retailer Ross Stores reported better-than-expected results and saw new-customer growth. The reports support a value-seeking and trade-down narrative rather than a uniform demand recession. Housing remains a pressure point because construction costs, mortgage rates and long yields are high.

Sources: AP, U.S. Census Bureau, Walmart

Commodities, Currencies & Macro Assets

Message: oil represented inflation and geopolitical risk; gold and bitcoin represented fiscal/liquidity hedges. With the dollar weaker, consistent with a term-premium shock not a growth acceleration.

Sources: LPL, AP

Liquidity Conditions

Treasury long-end buybacks are liquidity-support operations, small “operation twist”. They do not eliminate net issuance or the fiscal supply problem.

Sources: U.S. Treasury, Federal Home Loan Bank of New York

Flows & Positioning

Demand in crypto: U.S. spot-bitcoin ETFs netted more than $1 billion of weekly inflows, the strongest since January, alongside a leveraged short squeeze.

Sources: AP

What Matters This Week

The four market tells:

Inflation: a core PCE print above 0.2% m/m would challenge the September-hold consensus and could push the 30-year through the roughly 5.30% area the market has been testing.

AI earnings: Nvidia validating revenue growth and the durability of margins and customer financing capacity as capital costs rise.

Fed Policy: Warsh reconciling inflation concerns with Treasury’s effort to improve long-end liquidity.

Geopolitics: Oil above $90 keeps the inflation concerns high.

Sources: BEA, Kansas City Fed, Kiplinger

Bottom Line

Last week weakened the equity tape without breaking; volatility stayed calm, investment-grade credit was flat, and hard assets soared. A benign PCE print plus strong Nvidia guidance could re-open the AI/momentum/growth trade; a hot inflation print, a 30-year yield above roughly 5.30%, or a hawkish Jackson Hole message would reinforce the rotation away from long-duration growth. The key question is whether interest rates stabilize before tech leadership narrows further.

Stock Talk

Interest Rates vs. Earnings: Which wins the Trillion-dollar tug of war on the S&P 500.

Sources & Data Notes

Figures are price returns unless otherwise noted. Indexes are unmanaged. Published market data can differ slightly because of cutoff times, benchmark construction, and preliminary closes. This report is informational and does not provide personalized investment advice.

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.

[1] LPL Research weekly performance tables, Aug. 21, 2026

[2] AP: Major U.S. indexes, week ended Aug. 21, 2026

[3] AP: Bonds, oil, bitcoin and gold, Aug. 21, 2026

[4] Federal Reserve: July 28-29 FOMC minutes

[5] U.S. Treasury: increased long-end liquidity-support buybacks

[6] U.S. Census Bureau: July 2026 residential construction

[7] U.S. Labor Department: weekly unemployment claims, Aug. 20, 2026

[8] Walmart: FY2027 second-quarter earnings release

[9] FactSet: S&P 500 earnings season update, Aug. 7, 2026

[10] Trefis: five-trading-day S&P 500 movers

[11] StatMuse: S&P 500 weekly laggards, Aug. 14-21, 2026

[12] BEA: economic release schedule