Coverage: August 12th–19th, 2026
Wall Street managed to fit a victory lap and a mild hangover into the same week. After softer inflation data eased fears of another near-term Fed hike, the S&P 500 climbed 0.65% Thursday to a record close of 7,798.99. The Nasdaq added 0.81%, with investors leaning back into the technology names that have carried much of 2026's rally.
Then the bond market entered the chat. By Tuesday, the S&P 500 had fallen for three straight sessions, while the Nasdaq dropped 1.33% and the Philadelphia Semiconductor Index sank 5%. Nvidia fell 2.3%, Micron lost 7%, and Sandisk dropped 9%. The move looked less like investors abandoning equities broadly and more like another reminder that expensive, long-duration technology stocks feel every wiggle in interest rates.
July inflation arrived about as politely as an inflation report can. The Consumer Price Index rose 0.1% during July and 3.4% from a year earlier, down slightly from June's 3.5% annual pace. Core CPI rose 0.2% for the month and 2.5% year over year. Energy prices fell 1.5% during July, while shelter increased just 0.1%.
The following morning brought another relatively friendly print. The Producer Price Index was flat in July, with goods prices falling 0.7% and services rising 0.2%. Annual producer inflation eased to 4.7% from 5.5% in June. That left investors with a strange pairing: inflation data cooling enough to ease immediate Fed pressure while longer-term borrowing costs were moving the other direction.
The Fed's July meeting ended with a 9–3 vote to keep the federal funds rate at 3.50%–3.75%, with three policymakers preferring a quarter-point increase. Minutes from that meeting arrive Wednesday afternoon, giving markets a closer look at just how deep that disagreement runs.
The American consumer has spent much of this cycle behaving like the person who keeps saying, "I'm leaving after this one," then orders another round. July finally brought a quieter tab.
Retail and food-service sales fell 0.6% in July to $763.6 billion, versus June's 0.2% increase. Sales were still 5% above July 2025 levels, but the monthly weakness ran deeper than the headline. Online sales fell 2.2%, auto-related purchases slid 1.8%, and a closely watched core measure declined 0.4%. Part of the decline reflected Amazon shifting Prime Day into June, though the broader result still pointed toward a consumer becoming more selective.
That matters because consumer spending has carried a large share of the economic expansion. Cooler spending can help relieve inflation pressure. Too much cooling creates an entirely different conversation. July's data landed somewhere in the awkward middle.
Softer CPI usually gives Treasury investors a reason to relax. This week, the long end had other plans.
The 30-year Treasury yield climbed to its highest level in nearly two decades, pressured by heavy government borrowing, persistent inflation concerns, Middle East energy risks and questions around global demand for U.S. debt. AI is even showing up here: record borrowing tied to data centers and infrastructure is adding more corporate supply competing for investor capital.
Higher long-term yields reach far beyond the bond aisle. They influence mortgage rates, corporate financing costs and the discount rates investors use to value future earnings. That helps explain why the week's bond selloff landed hardest on AI and semiconductor shares. The market spent much of the past year asking whether companies could build enough AI capacity. It is increasingly asking what the financing bill looks like.
The rate story was especially visible in housing. Total housing starts fell 12.4% in July, while single-family starts dropped 9.9% to their lowest annualized pace since November 2022. Higher mortgage rates continue to make both builders and buyers think twice.
Factories told a very different story. Industrial and manufacturing production each rose 0.2% in July, with manufacturing excluding motor vehicles up 0.4%. High-tech equipment and supplies tied to the AI investment boom have helped keep the industrial side of the economy moving even as rate-sensitive housing struggles.
Ohio State landed at No. 1 and Oregon at No. 2 in the AP preseason poll, giving the Big Ten the top two preseason spots for the first time since 1961. Defending national champion Indiana starts sixth. Meanwhile, the SEC placed nine teams in the Top 25 and five inside the Top 10.
The NFL pre-season has begun as well. Highlights include: Jaxson Dart’s weekly trip to the blue tent, Shadeur Sanders still looking like a fifth round pick, and the usual hype surrounding the top picks from the NFL draft.
The more things change, the more they stay the same.