The Markets (as of market close August 7, 2026)
Wall Street ended last week on solid footing, with each of the major benchmark indexes posting notable gains. Strong second-quarter corporate earnings and a cooler-than-expected labor report helped ease concerns about aggressive monetary tightening in the near term. The NASDAQ led the major indexes higher, while the S&P 500, Dow, Russell 2000, and Global Dow also posted solid weekly advances.
Information technology, consumer discretionary, materials, and communication services were among the strongest-performing sectors, while utilities, energy, and real estate lagged. Treasury yields declined following the jobs report, while a weaker U.S. dollar helped support gains in gold and other precious metals. Crude oil prices remained volatile amid ongoing tensions in the Strait of Hormuz, although hopes for a potential agreement between Iran and Oman helped push prices lower by the end of the week.
Last Week’s Economic News
-
Employment declined slightly in July, while the unemployment rate edged down to 4.1%. May and June employment figures were revised lower, reinforcing signs that hiring has slowed considerably this summer.
-
Wage growth continued to moderate. Average hourly earnings rose only slightly in July and were up 3.2% over the past 12 months. Labor force participation also declined, while the employment-population ratio also fell.
-
Manufacturing activity continued to expand, with the S&P Global U.S. Manufacturing PMI holding at 53.9 in July. However, new orders slowed for a third consecutive month as inflation pressures weighed on demand and business confidence.
-
Services activity accelerated in July, with the S&P Global U.S. Services PMI rising in June. New business increased at its fastest pace since November 2025, although rising energy costs and tariffs contributed to higher input prices.
-
Job openings remained relatively stable at 7.4 million in June. Hiring was unchanged at 5.3 million, while total separations were little changed at 5.4 million.
-
The U.S. trade deficit narrowed to $73.3 billion in June, down 5.6% from May. Both exports and imports declined during the month, while the year-to-date deficit remained significantly below its level from the same period in 2025.
-
Weekly jobless claims remained low at 199,000, while continuing claims increased modestly to 1.801 million, suggesting employers remain reluctant to reduce headcount despite slower hiring.
-
The national average price for regular gasoline fell slightly, though prices remain higher than one year ago.
Eye on the Week Ahead
Inflation will be the primary focus this week with the release of the July Consumer Price Index and Producer Price Index. Stock traders will also review the latest retail sales report for additional insight into consumer strength. With hiring showing clear signs of slowing, upcoming inflation data could play an important role in shaping expectations for the Federal Reserve’s next policy move.
Have a nice week!
Sincerely,
Robert G. Carpenter