August 2026 Market Update

What We're Watching as We Move Through the Second Half of the Year

Markets experienced some volatility in July as rising interest rates, changing expectations around AI spending, and ongoing geopolitical uncertainty weighed on investor sentiment. Even with the pullback, year-to-date market performance remained strong.

📊 Markets at a Glance
U.S. Stocks
Large-cap stocks remained relatively resilient, while small-cap stocks experienced a larger decline as higher interest rates and signs of a softer labor market created headwinds.

Bonds
Rising Treasury yields pressured fixed-income investments. The 10-year Treasury yield increased to 4.75%, contributing to declines across several bond sectors.

Technology & AI
Investors became more cautious about the pace of AI-related spending, creating some pressure on technology stocks. However, corporate earnings remained encouraging, with 86% of reporting S&P 500 companies beating earnings expectations.

Global Markets
Emerging markets faced additional pressure, particularly technology-heavy markets such as South Korea and Taiwan. Geopolitical tensions and evolving trade policies also remained key considerations for investors.

🔎 What We're Watching
Interest Rates & Inflation
The Federal Reserve held interest rates steady in July as policymakers continued to monitor inflation. While inflation showed signs of improvement, it remained above the Fed's 2% target, keeping the possibility of higher-for-longer rates in focus.

The U.S. Economy
The economy continued to show resilience. Consumer spending and labor-market conditions supported growth, while second-quarter GDP increased at a 1.5% annualized pace.

Geopolitical & Trade Developments
Developments in the Middle East and changes in U.S. trade policy continued to influence market expectations. Investors are watching how these developments could affect inflation, economic growth and corporate earnings.

💡 The Bigger Picture
While market headlines can change quickly, the broader outlook remains centered around resilience, selectivity and diversification.

Strong corporate earnings and continued economic growth provide reasons for optimism, while elevated interest rates and inflation risks remind investors that volatility can be part of the journey.

Our Takeaway
Don't let a month of market movement distract you from your long-term plan.

A well-designed financial strategy isn't built around predicting every market move. It's built around understanding your goals, managing risk and maintaining a diversified approach through changing market conditions.

Have questions about what the current market environment means for you? We're here to help you put the headlines into perspective.