The S&P 500 index rose 0.4% this week after cooling inflation and an unexpected drop in retail sales boosted the odds for a sixth straight monetary policy pause in September. The market benchmark ended the week at 7,785.76. The index is now up 3.8% quarter-to-date and around 14% this year. The Nasdaq Composite Index edged up 0.14% last week and is up around 15% for the year closing at around 26,729.16. The Dow Jones Industrial Average slid 0.56%. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 0.26%.1,2 Third Straight Week for S&P 500The probability of the Federal Reserve extending its policy pause next month jumped after July's consumer and wholesale price inflation rates, both headline and core, declined and retail sales for the month unexpectedly slumped the most since May 2025. There's now a 67% chance that the Fed will leave interest rates unchanged, up from 56% a week ago, according to the CME FedWatch tool. Treasury Secretary Scott Bessent said on CNN that the US plans to announce measures on Iran next week that have "never been seen." Defense Secretary Pete Hegseth said the US can sustain its blockade against Iran "indefinitely," Al Jazeera reported. The energy sector in the S&P 500 had the largest percentage gain of the week, up 7.3%, followed by a 1.5% advance in utilities and 1% increases for both consumer staples and health care. Financials, industrials, real estate and tech also rose week to week. Phillips 66 (PSX) is expected to accelerate share repurchases in H2 this year, supported by ongoing balance sheet deleveraging, UBS said in a note. Separately, Phillips 66, Kinder Morgan (KMI), and HF Sinclair (DINO) said they have reached a final investment decision to move forward with a joint venture to build the $5 billion Western Gateway Pipeline system. Shares of Phillips 66 surged 15% this past week. Three S&P 500 sectors that declined last week were consumer discretionary, communication services and materials, down 2%, 1% and 0.9%, respectively. Tapestry (TPR) shares tumbled 21% last week after the company set out a fiscal 2027 revenue outlook below the midpoint of Wall Street's forecast range, taking the shine off stronger-than-expected fiscal Q4 adjusted earnings and revenue. AppLovin's (APP) 30% long-term annual revenue growth target lacks sufficient evidence, with uncertainty rising around the sustainability of its self-learning growth, BofA Securities said in a report. BofA downgraded its rating on AppLovin stock to neutral from buy and lowered its price target to $400 from $430. Shares of Applovin slumped 9% last week. |
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Source: YCharts.com, August 15, 2026. Weekly performance is measured from Monday, August 10 to Friday, August 14. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points. |
Inflation Cools, Spending SlowsWednesday’s Consumer Price Index (CPI) report showed consumer prices rose 0.1% in July over the prior month and 3.4% over the prior 12 months. Both figures came in as expected, which was welcomed news for investors. Thursday’s Producer Price Index (PPI) showed that the pace of wholesale inflation also slowed more than expected.7 But the inflation update was somewhat countered by news that consumers spent less in July. Economists expected a 0.1% increase in July retail sales over the prior month, but they actually fell 0.6% month-over-month.8 Charts of The WeekUS Stocks vs. Foreign Stocks (10-YR Performance Comparison)The S&P 500 Index has outperformed the MSCI All-Country World Index by about 91% over the past decade. US Mega-Cap Technology Dominance is the major factor, driven primarily by the strong relative performance of U.S. large-cap technology stocks. U.S. mega-cap tech stocks like Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Meta (META), and NVIDIA (NVDA) make up 14.8% of ACWI, while international holdings include Tencent, ASML, SAP, and Nestlé. That massive concentration of high-performing U.S. names pulled the S&P 500 far ahead. When the Magnificent 7 are excluded, the performance of the broader S&P 500 looks much different. The 493 companies outside the Magnificent 7 have seen their earnings stagnate over the past three years, compared to the 9% earnings growth witnessed by international companies in that time, as measured by the MSCI ACWI ex-U.S. In other words, a very small number of U.S. names drove the lion's share of the index's return advantage. A significant portion of U.S. equity outperformance can be attributed to the dollar's rally against virtually every major currency over the past fifteen years. When international returns are translated back into USD, currency headwinds drag down the reported performance of non-U.S. holdings — a structural disadvantage for global indices like ACWI. The S&P 500's net profit margin and return on equity (ROE) are near record highs, and the index is trading at an elevated forward price-to-earnings (P/E) ratio of 23x, well above its 20-year average of 16x. Expanding multiples over the decade provided a meaningful tailwind to U.S. equity prices beyond just earnings growth. Choosing ACWI over a U.S.-only fund means accepting that when American equities outperform globally, you will lag. Over the past decade, that trade cost investors roughly 18 percentage points compared to the S&P 500. ACWI's U.S.-tilted structure and concentration in mega-cap technology reduce its value as a diversification tool during periods of U.S. equity dominance.
Semiconductor Stocks Continue Their Epic RunDespite the recent pull-back from July to early August. Over the past 12 months, as you can see from the chart, Semiconductor stocks have outperformed the S&P 500 by about 100% and Nasdaq by nearly 97%. The semiconductor rally is being fueled by a combination of surging AI-driven chip demand, massive capital commitments from both tech giants and governments, strong earnings, and pricing power signals from industry leaders like TSMC, Micron, and others. The market is pricing in a sustained, multi-year buildout of AI infrastructure — and semis are at the center of it.
This Week: Key Economic DataMonday: NAHB Housing Market Index. Tuesday: Housing Starts. Import Prices. Industrial Production. Capacity Utilization. Pending Home Sales. Wednesday: Fed Meeting Minutes from July published. Thursday: Weekly Jobless Claims. Leading Indicators. Friday: Purchasing Managers Index (PMI)—Manufacturing. PMI—Services. Source: Investor’s Business Daily - Econoday economic calendar: August 14, 2026. This Week: Companies Reporting EarningsTuesday: The Home Depot, Inc. (HD), Keysight Technologies Inc. (KEYS) Wednesday: Analog Devices, Inc. (ADI), The TJX Companies, Inc. (TJX), Lowe’s Companies, Inc. (LOW), Target Corporation (TGT) Thursday: Walmart Inc. (WMT), Deere & Company (DE), Ross Stores, Inc. (ROST) Source: Zacks, August 14, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice. |
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"The secret of happiness isn't found in seeking more, but in developing the capacity to enjoy less." –Socrates |
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Blueberries: Small but MightyDon't let their size fool you! Blueberries pack a serious nutritional punch. Among the most antioxidant-rich foods you can eat, they're as good for your body as they are delicious. Stir them into yogurt or cottage cheese for a quick, satisfying snack, muddle them into a glass of sparkling water for a naturally sweet drink, or fold them into homemade muffins and pancakes for a colorful, nutritious upgrade. Keep a bag in the freezer so you always have some on hand. Tip adapted from Healthline9 Rest, Relaxation, and Healthy NutritionHere are some tips on how to stay healthy, even during long trips:
There’s no reason why you must sacrifice all your hard work and healthy habits while visiting family or heading to warmer destinations. Continuing a healthy lifestyle while traveling will help you have even more fun! Tip adapted from Sharp.com10 |
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I never complain no matter where I am led; I go around in circles, yet move straight ahead. What am I? Last Week's Riddle: Buried in wood from one end to the other, my head is exposed while I keep things together. What am I? Answer: A nail. |
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Saffron-crowned Tanager (Tangara xanthocephala) |
Footnotes And Sources1. WSJ.com, August 14, 2026 11. MT Newswires, YCharts.com, August 10-17, 2026 12. Yahoo Finance, August 14, 2026 |
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