Weekly Market Update: August 24, 2026

Market Update
Written By Trey Kerns

Week Ending August 21, 2026:

S&P 500: -0.91%
NASDAQ Composite: -1.74%
Dow Jones Industrial Average: -0.34%

Market Takeaway

U.S. equity markets finished the week ending August 21 lower, with all three major indices posting declines.

The S&P 500 fell 0.91%, the NASDAQ Composite declined 1.74%, and the Dow Jones Industrial Average fell 0.34%. Technology shares were among the weaker areas of the market, contributing to the NASDAQ’s larger decline relative to the S&P 500 and Dow.

Long-term Treasury yields, higher oil prices, geopolitical uncertainty surrounding Iran, and weakness in technology contributed to a more cautious market environment during portions of the week. Markets recovered some ground on Friday as investors evaluated stronger business-activity data and developments in the Treasury market.

Economic data remained mixed but generally pointed to continued expansion. Housing starts weakened sharply, while building permits increased. Industrial production posted modest growth, regional manufacturing activity strengthened, jobless claims remained relatively low, and preliminary PMI data showed faster overall private-sector activity led by services.

Overall, the week reflected weaker equity performance, pressure on technology shares, notable differences in sector performance, and continued attention on interest rates, inflation, geopolitical developments, and economic growth.

Thematic Drivers of the Week

1. Treasury Yields and Interest Rates Remained in Focus

What happened:

Long-term Treasury yields remained an important market consideration as investors continued to evaluate inflation, government debt, fiscal conditions, and the outlook for monetary policy.

Minutes from the Federal Reserve’s July 28-29 meeting were also released Wednesday. Most participants supported maintaining the federal funds rate at 3.50%-3.75%, while several participants favored a 25-basis-point increase.

Why it mattered:

Higher long-term interest rates can affect borrowing costs and valuations across financial markets. Growth-oriented companies can be particularly sensitive to changes in rates because a greater portion of their expected earnings may occur further in the future.

The Federal Reserve minutes also reinforced that inflation remained elevated relative to the Fed’s 2% objective.

Market reaction:

Movements in Treasury yields contributed to periods of pressure on equities during the week, particularly across technology and other growth-oriented areas.

2. Technology Weakness Created Greater Sector Dispersion

What happened:

Technology was the weakest-performing sector based on the sector data reviewed, declining 3.69% for the week.

Health Care moved in the opposite direction, gaining 4.53% and finishing as the strongest-performing sector.

Why it mattered:

Technology represents a significant portion of the major U.S. equity indices, particularly the NASDAQ Composite and S&P 500. Weakness across large technology and semiconductor-related companies can therefore have an outsized effect on broader index performance.

At the same time, stronger performance in Health Care highlighted the differences in market participation beneath the headline indices.

Market reaction:

The NASDAQ Composite experienced the largest weekly decline of the three major indices, while Health Care provided an area of relative strength as technology shares weakened.

3. Oil, Geopolitics, and Economic Data Influenced Sentiment

What happened:

Oil prices moved higher amid continued geopolitical uncertainty surrounding Iran.

U.S. economic reports also provided a mixed picture. Housing starts declined, industrial production increased modestly, regional manufacturing activity strengthened, and preliminary PMI data indicated faster overall private-sector activity.

Why it mattered:

Oil prices can affect transportation costs, household budgets, business expenses, and inflation expectations.

Economic data also remained important as investors evaluated the pace of economic growth, labor-market conditions, and inflation.

Market reaction:

Major indices experienced weakness during portions of the week before recovering some ground on Friday. Stronger business-activity data and developments in the Treasury market helped offset some of the earlier pressure.

Sector Performance

Best-Performing Sector: Health Care

The S&P Health Care Select Sector Index increased 4.53% during the week based on the sector data reviewed.

Health Care’s gains represented an area of relative strength during a week when all three major equity indices finished lower. The performance also highlighted increased dispersion between different areas of the market.

Worst-Performing Sector: Technology

The S&P Technology Select Sector Index declined 3.69% during the week based on the sector data reviewed.

Technology experienced broad weakness during portions of the week, including pressure across semiconductor and artificial-intelligence-related hardware companies. The sector’s decline contributed to the NASDAQ Composite’s larger weekly loss relative to the S&P 500 and Dow.

Earnings Recap: Key Companies in Focus

Home Depot (HD) - Reported August 18

Results:

  • Estimated EPS: $4.73

  • Actual EPS: $4.92

  • Result: Beat by 3.97%

  • Revenue: Beat by 1.35%

Takeaway:

Home Depot reported earnings and revenue above the estimates provided. The results offered another data point on home-improvement spending and housing-related consumer demand.

Target (TGT) - Reported August 19

Results:

  • Estimated EPS: $2.34

  • Actual EPS: $4.11

  • Result: Beat by 75.83%

  • Revenue: Beat by 1.54%

Takeaway:

Target reported earnings and revenue above the estimates provided. The results offered additional perspective on discretionary consumer spending.

Walmart (WMT) - Reported August 20

Results:

  • Estimated EPS: $0.74

  • Actual EPS: $0.81

  • Result: Beat by 9.27%

  • Revenue: Beat by 0.60%

Takeaway:

Walmart reported earnings and revenue above the estimates provided, offering another view into broad consumer spending and value-oriented purchasing activity.

Alibaba Group (BABA) - Reported August 20

Results:

  • Estimated EPS: ¥10.82

  • Actual EPS: ¥8.52

  • Result: Missed by 21.26%

  • Revenue: Beat by 0.23%

Takeaway:

Alibaba reported earnings below the estimate provided while revenue came in modestly above expectations.

Major Economic Reports Recap

Housing Starts and Building Permits - Released August 18

July housing starts fell 12.4% to a seasonally adjusted annual rate of 1.239 million and were 13.5% below July 2025.

Single-family housing starts declined 9.9%.

Building permits moved in the opposite direction, increasing 5.0% to 1.443 million, including a 2.5% increase in single-family permits.

Economic Takeaway:

Current residential construction activity weakened considerably in July, while the increase in permits provided a different signal about potential future construction activity.

Industrial Production and Capacity Utilization - Released August 18

Industrial production increased 0.2% in July, following a revised 0.3% increase in June.

Manufacturing production increased 0.2%, mining rose 0.2%, and utilities increased 0.5%.

Capacity utilization edged higher to 76.3%, remaining 3.1 percentage points below its 1972-2025 average.

Economic Takeaway:

Industrial activity continued to expand at a modest pace, with gains across manufacturing, mining, and utilities.

Philadelphia Fed Manufacturing Survey - Released August 20

The general activity index increased from 41.4 to 47.4, its highest level since April 2021.

New orders remained strong at 30.1, while the employment index increased from 10.0 to 27.9, its highest level since April 2022.

The prices-paid index declined from 53.9 to 40.9, although price measures remained elevated.

Economic Takeaway:

The regional survey indicated continued manufacturing expansion and stronger employment conditions, while reported price pressures moderated somewhat.

Initial Jobless Claims - Released August 20

Initial jobless claims declined to 206,000 for the week ended August 15, down 6,000 from the prior week’s revised 212,000.

The four-week moving average increased from 199,750 to 204,000.

Economic Takeaway:

Weekly claims remained relatively low, suggesting layoffs remained contained, although the four-week moving average moved somewhat higher.

S&P Global Flash Manufacturing and Services PMIs - Released August 21

The preliminary August Composite PMI increased to 56.0 from 54.5 in July, reaching a 52-month high.

The Services PMI increased to 56.8, a 20-month high, while the Manufacturing PMI registered 53.2, a five-month low. Manufacturing output registered 51.9, a 13-month low.

Input-cost growth slowed to its weakest pace since February, while average selling-price inflation eased to its weakest pace since November.

Economic Takeaway:

The preliminary August data indicated faster overall private-sector activity led by services, while manufacturing growth moderated and surveyed price pressures eased.

Federal Reserve Meeting Minutes - Released August 19

Minutes from the Federal Reserve’s July 28-29 meeting showed that most participants supported keeping the federal funds rate unchanged at 3.50%-3.75%, while several participants favored a 25-basis-point increase. The final vote was 9-3.

Participants generally viewed economic activity as continuing to expand at a solid pace and labor-market conditions as stable, while emphasizing that inflation remained elevated relative to the Federal Reserve’s 2% objective.

Most favored waiting for additional information to provide greater clarity on the inflation outlook before adjusting policy.

Economic Takeaway:

The minutes reflected continued concern about elevated inflation, with most policymakers favoring patience while a minority supported a more restrictive policy stance.

Technical Perspective

Based on the technical notes provided:

  • The S&P 500 remained above its 50-day moving average

  • The S&P 500 remained above its 200-day moving average

  • The NASDAQ Composite remained above its 50-day moving average

  • The NASDAQ Composite remained above its 200-day moving average

  • The Dow Jones Industrial Average remained above its 50-day moving average

  • The Dow Jones Industrial Average remained above its 200-day moving average

  • The VIX ended the week at 15.13

Interpretation:

Despite the week’s declines, all three major indices remained above their intermediate- and longer-term moving averages based on the technical data reviewed.

The VIX remained relatively subdued despite increased volatility during portions of the week.

These indicators can help provide context around recent price trends and market volatility, but they do not predict future returns or eliminate the possibility of short-term market declines.

Key Takeaways for Investors

  • The S&P 500, NASDAQ Composite, and Dow Jones Industrial Average all declined for the week

  • Technology was the weakest-performing sector based on the sector data reviewed, while Health Care provided relative strength

  • Long-term Treasury yields remained an important influence on market sentiment

  • Housing starts declined sharply while building permits increased

  • Industrial production continued to grow modestly

  • Regional manufacturing activity strengthened and initial jobless claims remained relatively low

  • Preliminary PMI data indicated faster overall private-sector activity led by services

  • Federal Reserve minutes showed continued attention on elevated inflation and the appropriate stance of monetary policy

  • Weekly market developments can be reviewed within the context of diversification, risk tolerance, liquidity needs, time horizon, and long-term financial goals

Looking Ahead

Investors will be monitoring a combination of technology earnings, consumer data, inflation information, housing reports, and Federal Reserve commentary during the week ending August 28.

Earnings to Watch This Week

NVIDIA (NVDA) - August 26

NVIDIA is scheduled to report quarterly results Wednesday after the market closes.

The report may provide additional information about demand for artificial-intelligence computing, semiconductors, and data-center infrastructure.

Salesforce (CRM) - August 26

Salesforce is scheduled to report quarterly results Wednesday after the market closes.

Its results may provide additional information about enterprise software spending and demand for AI-related products and services.

CrowdStrike (CRWD) - August 26

CrowdStrike is scheduled to report quarterly results Wednesday after the market closes.

The report may provide additional information about cybersecurity demand and enterprise technology spending.

Dollar General (DG) - August 27

Dollar General is scheduled to report quarterly results Thursday.

Its results may provide another perspective on consumer spending and value-oriented shopping behavior.

Economic Data to Watch

New Home Sales - August 25

The July report can provide additional information about demand for newly constructed homes, sales activity, inventory, and housing-market conditions.

Consumer Confidence - August 25

The August Consumer Confidence report can provide insight into household views of current economic conditions, the labor market, and expectations.

Durable Goods Orders - August 26

The July report can provide information about new orders for longer-lasting manufactured goods and broader business-investment activity.

Second Estimate of Second-Quarter GDP - August 26

The updated estimate can provide additional information about the pace and composition of U.S. economic growth during the second quarter.

PCE Inflation - August 26

The July Personal Income and Outlays report will include the Personal Consumption Expenditures price indexes.

The PCE price index is an important inflation measure monitored by the Federal Reserve and can provide additional information about consumer prices, income, and spending.

Federal Reserve and Policy Notes

No Federal Reserve policy meeting is scheduled for the week.

Federal Reserve Chair Kevin Warsh is scheduled to deliver keynote remarks at the Jackson Hole Economic Policy Symposium on Friday, August 28.

The remarks may provide additional context around the Federal Reserve’s assessment of economic activity, inflation, and monetary policy.

The next scheduled FOMC meeting is September 15-16, 2026.

Closing Thought

Markets finished the week lower, but the underlying information again did not point in only one direction.

Technology shares weakened and long-term Treasury yields remained an important consideration, while Health Care provided relative strength. Housing activity softened, but industrial production grew modestly, regional manufacturing strengthened, jobless claims remained relatively low, and preliminary business-activity data continued to indicate expansion.

Weeks with conflicting market and economic signals can serve as a reminder that short-term market movements are only one part of the financial picture. It can be helpful to evaluate new information alongside long-term goals, cash-flow needs, risk tolerance, time horizon, and an appropriately diversified financial plan.

Sources

Disclosure: This market update is for informational and educational purposes only and should not be considered investment advice or a recommendation to buy or sell any security. Market data and company results are subject to revision and interpretation. Past performance does not guarantee future results. Investing involves risk, including the potential loss of principal.

Trey Kerns https://KernsLegacyPlanning.com
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