AE Wealth Management: Weekly Market Insights | 8/9/26 – 8/15/26

Weekly Market Commentary

THE WEEK IN REVIEW: Aug. 9-15, 2026

Markets set records while the Iran stalemate grinds on

There’s something surreal about watching stocks climb to new highs while the world’s busiest oil route sits effectively shut. The S&P 500 cleared 7,800 for the first time on Thursday, setting its 27th record close of the year.¹ It was the third consecutive weekly gain for the S&P 500, its longest run since May.²

Earnings deserve much of the credit. With 440 of the 500 S&P companies having reported second-quarter results, 86% have surpassed estimates.³ Technology and AI-related names led the way once again, and the enthusiasm has started spreading into other sectors.

Meanwhile, the picture in the Strait of Hormuz hasn’t budged. Tanker traffic through the waterway has slowed to a trickle, with only a handful of vessels crossing in recent days. Iran says the strait stays closed until Washington meets its conditions, but Washington says it controls the waterway as talks keep stalling.

Oil has been whipsawing on every headline, trading above $80 midweek and falling more than 2% on Thursday before climbing back up by the end of the week after Treasury Secretary Scott Bessent said the U.S. would impose economic measures on Iran that have “never been seen.” The International Energy Agency (IEA) also warned that global oil stockpiles are drawing down quickly.⁴ At the pump, the national average pushed back up over $4 per gallon.

What should we make of a market at record highs against that backdrop? Investors appear to have priced the war as a known quantity rather than a resolved one. It’s a reasonable read but also a fragile one, because the risk premium hasn’t gone anywhere.

Inflation cools somewhat

Both inflation reports last week came in soft. The July Consumer Price Index (CPI) reading rose 0.1% for the month and 3.4% year over year, down from 3.5% year over year in June and right in line with forecasts.⁵ Core CPI, which strips out food and energy, rose 0.2% for the month and 2.5% annually. Shelter did most of the monthly lifting, accounting for roughly two-thirds of the headline increase.

Energy was a big reason for the softer number, falling 1.5% in July after dropping 5.7% in June. Look at the annual figures, though, and the story flips: Energy is still up 14.7% from one year ago, gas is up 24.6% and fuel oil is up 39.1%.⁶ Households are feeling the pinch, especially since wage growth isn’t keeping up with prices.

Wholesale prices told a similar story. The Producer Price Index (PPI) was flat month over month, and the annual rate dropped to 4.7% from 5.5% in June — below the 4.9% economists had penciled in.⁷

This is inflation decelerating from a shock rather than resuming its earlier downtrend. CPI was running 2.4% in February before the conflict began, spiked to 4.2% in May and has eased for two months since.⁸ Where it settles from here depends largely on oil, and oil depends on a standoff for which nobody can predict an ending date. A single headline out of Hormuz can also undo two months of progress.

That dynamic is one of the reasons why the Federal Reserve conversation sounds so different this year. Traders trimmed the odds of a September rate hike to roughly 31% after the CPI release.⁹ But at least one Fed official has said publicly that multiple hikes may still be needed to bring inflation down, and the committee remains split headed into the Fed’s Jackson Hole symposium Aug. 27-29.

Coming this week

• Lots of data this week! We’ll start with the Empire State manufacturing survey and NAHB Housing Market Index on Monday.
• Tuesday will feature housing starts, import prices, industrial production and pending home sales.
• On Wednesday, the meeting minutes from the last Fed meeting will be published. It will be interesting to see if we can glean any additional insights on the Fed’s outlook and the division among committee members.
• The Philadelphia Fed will release its Business Outlook Survey on Thursday. We’ll also get weekly jobless claims and leading indicators that day.
• Finally, we’ll wrap up the week with US Flash Manufacturing and Services numbers.

Sources:

¹ Sean Conlon, et al. CNBC. Aug. 13, 2026. “S&P 500 closes at a new record, buoyed by cooler-than-expected inflation data and falling oil prices.” https://www.cnbc.com/2026/08/12/stock-market-today-live-updates.html. Accessed Aug. 17, 2026.

² Grace O’Donnell and Ines Ferré. Yahoo! Finance. Aug. 14, 2026. “Stock market today: S&P 500 slips from record high but caps third straight week of gains.” https://finance.yahoo.com/markets/live/stock-market-today-friday-august-14-dow-sp-500-nasdaq-102635519.html. Accessed Aug. 17, 2026.

³ John Butters. FactSet. Aug. 7, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_080726.pdf. Accessed Aug. 17, 2026.

⁴ CNN. Aug. 14, 2026. “August 13, 2026 — Strait of Hormuz traffic remains low as world burns through oil stockpiles.” https://www.cnn.com/2026/08/13/world/live-news/iran-war-trump. Accessed Aug. 17, 2026.

⁵ U.S. Bureau of Labor Statistics. Aug. 12, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed Aug. 17, 2026.

⁶ Jessica Dickler. CNBC. Aug. 12, 2026. “Here’s the inflation breakdown for July 2026 — all in one chart.” https://www.cnbc.com/2026/08/12/inflation-breakdown-for-july-2026-cpi-in-one-chart.html. Accessed Aug. 17, 2026.

⁷ U.S. Bureau of Labor Statistics. Aug. 13, 2026. “Producer Price Index News Release summary.” https://www.bls.gov/news.release/ppi.nr0.htm. Accessed Aug. 17, 2026.

⁸ Trading Economics. “United States Inflation Rate.” https://tradingeconomics.com/united-states/inflation-cpi. Accessed Aug. 17, 2026.

⁹ CMEGroup. “FedWatch.” https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html. Accessed Aug. 17, 2026.

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