The Markets (as of market close August 14, 2026)
Wall Street finished mostly higher last week as cooling inflation, solid second-quarter corporate earnings, and growing expectations for a more dovish Federal Reserve helped support stock trader sentiment. The S&P 500 reached an all-time high on Thursday, climbing above 7,800, while the NASDAQ, Russell 2000, and Global Dow also posted weekly gains. The Dow finished modestly lower.
Nine of the 11 market sectors advanced, with only consumer discretionary and communication services ending the week lower. Treasury yields remained elevated but investor expectations for additional monetary tightening eased following encouraging inflation data. Meanwhile, crude oil prices climbed above $82 per barrel amid continued geopolitical tensions and U.S. efforts to pressure Iran to reopen the Strait of Hormuz.
Last Week’s Economic News
- Consumer inflation showed signs of cooling in July. The Consumer Price Index rose slightly for the month and 3.4% over the past 12 months, down from a 3.5% annual increase in June. Core prices, excluding food and energy, rose a bit in July and 2.5% over the past year. Energy prices fell during the month, while shelter and food prices each increased slightly.
- Producer prices were unchanged in July, as an increase in prices for services was offset by a decline in goods prices. Energy prices fell, while food prices also declined. Producer prices were up 4.7% from a year earlier.
- Retail sales fell in July, marking the first monthly decline since October 2025 and reversing June’s increase. Weakness was seen across several categories, including motor vehicles, electronics and appliances, gasoline stations, and online retailers. Despite the monthly decline, retail sales remained 5.0% higher than a year ago.
- Existing home sales declined in July but remained above their level from a year earlier. The median existing home sales price was down a tad from June but higher than July 2025. Housing inventory remained at a 4.6-month supply.
- The federal government recorded a $432 billion deficit in July, with receipts totaling $334 billion and outlays reaching $766 billion. Through the first 10 months of the fiscal year, the deficit totaled approximately $1.8 trillion, 10.5% higher than during the same period last fiscal year.
- Initial unemployment claims increased for the week ended August 8. Continuing claims declined to 1.777 million, while the insured unemployment rate remained unchanged.
- The national average price for regular gasoline fell as of August 10, down $0.073 from the prior week. Despite the recent decline, gasoline remained slightlymore expensive than a year ago.
Eye on the Week Ahead
The economic calendar is relatively light this week. Stock traders will be watching July import and export price data for additional signs of inflationary pressure, along with the latest industrial production report for insight into the health of the manufacturing sector. Following last week’s encouraging consumer inflation data, markets will also remain focused on how incoming economic reports could influence the Federal Reserve’s outlook for interest rates.
Have a nice week!
Sincerely,
Robert G. Carpenter