Markets

Stocks were mixed over a sleepy summer week, as cooling inflation lifted markets while sluggish retail sales nipped at investor sentiment.

The Standard & Poor’s 500 Index added 0.36 percent, while the Nasdaq Composite Index edged up 0.14 percent. The Dow Jones Industrial Average slid 0.56 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 0.26 percent.¹˒²

Third Straight Week of Gains for the S&P 500

Stocks began the week with mild declines, with megacap tech names under pressure as investors anxiously awaited inflation updates.³

But spirits lifted midweek as a July inflation report showed consumer prices increased at a slower pace, leading investors to hope the Fed would not adjust rates at its next meeting.

The AI trade also jumped back into the driver’s seat to add momentum. The rebound rally extended into Thursday as investors cheered a cooler-than-expected report that showed wholesale inflation slowed over the prior month. Falling oil prices also gave stocks a boost.⁴˒⁵

While stocks slipped slightly on Friday, the S&P 500 and Nasdaq each logged their third consecutive winning week.⁶

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 Slows

Wednesday’s Consumer Price Index (CPI) report showed consumer prices rose 0.1 percent in July over the prior month and 3.4 percent 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 percent increase in July retail sales over the prior month, but they actually fell 0.6 percent month over month.

© Mahoney Asset Management

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