Weekly Market Movers | August 17, 2026

Today on Weekly Market Movers

• Inflation Is Cooling: Inflation continued to ease, taking some pressure off the Fed to raise interest rates. 
• Consumers Are More Cautious: Weaker retail sales and consumer confidence suggest people are being more careful with their spending. 
• More of the Market is Participating: Small companies and emerging markets performed well, showing that gains aren’t just coming from big tech stocks. 
• AI Spending Gets a Closer Look: Investors are still excited about AI, but they want to see that all the spending is actually paying off. 
• Oil Prices Are Rising: Higher oil prices and uncertainty around Iran put energy costs and inflation back in focus. 
• Long-Term Rates Moved Higher: Longer-term interest rates rose as investors continued to weigh inflation and growing government debt. 
• Concerns About Global Growth: Weak economic data from China and Japan raised concerns about growth outside the U.S. 
• What We’re Watching: Fed updates, retail earnings, housing data, and inflation will help shape expectations for the economy and interest rates.

Watch the Full Video

Transcript

Good morning, and welcome to the Wealth Enhancement Weekly Market Movers video series. My name is Doug Huber, and I’m the Deputy Chief Investment Officer here at Wealth Enhancement.

Last week gave investors a fairly balanced, but increasingly complicated, picture of the economy and markets. The encouraging news came from inflation. July’s Consumer Price Index rose just over one-tenth of one percent for the month, while the annual inflation rate eased to 3.4%. Core inflation, which removes food and energy, also moderated to about 2.5%.

Producer prices were flat for the month. Taken together, those reports suggest that the sharp inflation pressures we saw earlier in the year are beginning to cool. This really matters because the Federal Reserve has been trying to determine whether it needs to raise interest rates again. The inflation data reduced some of that immediate pressure, but it didn’t settle the debate. Inflation remains above the Fed’s objectives. Oil prices have risen again in August, so the improvement is meaningful, but it’s not yet a straight line back to the price stability they’re seeking.

The more cautious news came out of the consumer last week. July retail sales fell six-tenths of one percent, or 0.6%, compared with expectations for a modest increase. Some of that decline may reflect timing. Amazon’s Prime Day occurred in June this year, and both online and auto sales were unusually weak for the month of July. Even so, the result deserves some attention.

Consumer sentiment also declined, suggesting households remain concerned about prices and the broader outlook.

Markets handled the mixed picture reasonably well. The S&P gained about four-tenths of one percent, or 0.4%. The NASDAQ was slightly positive last week.

Brighter spots came from small-cap stocks. They outperformed, up roughly 1% for the week, and emerging markets also outperformed. We view that broader participation as constructive because many of the recent returns have been concentrated in a relatively small number of very large technology companies.

Looking below the index level, the market remains selective. Several AI infrastructure companies rose sharply after reporting strong demand and improving outlooks. Super Micro and CoreWeave were prominent examples.

On the other side of the coin, Cisco moved in the opposite direction. Its revenue and earnings were strong, but its gross margin disappointed as the cost of AI components increased. The contrast captures an important theme: investors are still willing to support the beneficiaries of AI spending, but they’re paying much closer attention to margins, financing needs, and whether growth translates into durable profitability.

Energy was the strongest S&P 500 sector last week. WTI, or West Texas Intermediate crude oil, gained roughly 5% on the week as negotiations over the Strait of Hormuz with Iran remain unresolved. There has been a great deal of rhetoric and many headlines around the situation, so we anticipate continued commodity volatility going forward.

Because of that, refiners and other energy companies benefited from the jump in oil prices, as they are highly correlated to those moves. Oil is particularly important because it connects geopolitical events directly to household budgets, inflation, and interest rates. If shipping conditions normalize, energy prices could fall and make the Fed’s job easier. However, if disruptions worsen, higher gasoline and transportation costs could reverse part of the recent inflation improvement. We’re keeping a close eye on that going forward.

I think the bond market is where you’re seeing that uncertainty reflected. Two-year Treasury yields declined slightly, which is consistent with less concern about an immediate Fed rate increase, but the 10-year and 30-year Treasury yields rose. That steepening tells us investors are demanding more compensation to hold long-term bonds. Inflation uncertainty is certainly one reason, but heavy government borrowing and Treasury supply are others.

This is something we continue to watch. We do expect there will be a higher term premium on the back end of the curve, and we think longer-term rates could face pressure to remain somewhat elevated.

On the flip side, corporate credit spreads remain relatively stable. Risk appears to be centered more around interest-rate risk than concerns about corporate distress or borrowing conditions. That’s a positive sign.

Outside the U.S., new data released on Monday added another layer of caution. Chinese retail sales and industrial production were weaker than expected, while fixed investment declined further. Japan’s economy grew at only a 1.1% annualized rate.

There is some softness in other areas, and we continue to monitor global economies as a globally diversified investor. It’s something we’ll continue watching closely.

Looking ahead to this week, we hope to receive additional information that clarifies whether the recent slowdown is narrow or becoming more widespread. We’ll get housing starts, building permits, and industrial production data on Tuesday.

On Wednesday, the Federal Reserve will release minutes from its July meeting. Investors will focus on whether concerns around inflation were limited to the three Fed officials who favored a rate increase, or whether the minutes reveal broader support for additional tightening. Markets will be paying close attention to those Fed minutes.

Retail earnings will also be important. We’ll hear from Home Depot, Lowe’s, and Toll Brothers, which should provide insight into housing-related demand. We’ll also hear from Target, TJX, and Walmart, which will help us understand how consumers are adjusting their spending, whether promotions are increasing, and whether higher costs are affecting profit margins.

That should provide a useful read into the second quarter and consumer behavior when the rubber meets the road.

Finally, we’ll get a long-term Treasury auction and global inflation reports, both of which could influence bond yields this week. We are also keeping a close eye on any meaningful developments involving Iran and the Strait of Hormuz because those developments can quickly affect energy prices.

The practical takeaway is that the economy is cooling in some areas, inflation has improved, and corporate fundamentals remain quite constructive. That is balanced against energy risk, higher long-term yields, and uneven consumer demand, which argues against complacency.

This is an environment where we continue to emphasize diversification and true diversification. We want to think carefully about the risks we’re taking across sectors, regions, and bond maturities. We want to ensure we have unique and disparate risks within our portfolios. Ultimately, it’s about remaining disciplined and thoughtfully managing risk.

We’ll stay tuned and come back next week with new information. We look forward to talking with you then, and we appreciate you tuning in.

Thank you so much.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor’s specific circumstances. Investing involves risk, including possible loss of principal.

2026-13650