US Market Breakdown: Record Highs Meet a Bond Rout, Week of 10 August 2026

American shares set a fresh record last week on the back of two soft inflation readings, then handed a slice of it back to the bond market on Monday. The S&P 500 closed at 7,798.99 on Thursday 13 August, its first finish above 7,800, after July's producer price index came in flat against expectations of a 0.2% rise and the consumer price index the day before showed annual inflation easing to 3.4%.

The relief did not last. Friday brought a 0.6% drop in July retail sales and a University of Michigan sentiment reading of 51, and by Monday 17 August the 30-year Treasury yield had climbed to 5.31%, its highest since 2007, with Brent crude back near $91 a barrel as US-Iran talks over the Strait of Hormuz stalled again. The S&P 500 fell 0.5% to 7,745.06.

Underneath the index numbers, the week belonged to the companies building and supplying artificial-intelligence infrastructure.

Wall Street

The week started softly. On Tuesday 11 August the S&P 500 fell 24.91 points, or 0.3%, to 7,728.20, the Dow Jones Industrial Average lost 184.13 points to 53,791.85 and the Nasdaq Composite shed 159.91 points, or 0.6%, to 26,445.45, as the standoff with Iran hardened ahead of the inflation data.

Wednesday's consumer price index turned it around. Headline CPI rose 0.1% on the month, putting the annual rate at 3.4%, down from 3.5%, while core CPI — which strips out food and energy — rose 0.2% for an annual 2.5%. The S&P 500 added 0.26% to 7,748.50 and the Nasdaq 0.54% to 26,588.49, though the Dow slipped 21.58 points to 53,770.27.

Thursday was the high-water mark. With headline producer prices flat against a 0.2% consensus, the S&P 500 rose 0.65% to 7,798.99, the Nasdaq gained 214.54 points, or 0.81%, to 26,803.03, and the Dow added 69.72 points to 53,839.99.

Friday undid part of it. After the weak retail sales and sentiment figures, the S&P 500 slipped 0.2% to 7,785.76, the Dow fell 107.58 points to 53,732.41 and the Nasdaq lost 0.3% to 26,729.16. Even so, the S&P 500 finished the week up 0.4% for a third consecutive weekly gain and the Nasdaq added 0.1%. The Dow fell 0.6% and snapped a two-week winning run. The standout was the small-cap Russell 2000, which rose 3.15% on the week to a record 3,068.42.

Monday's session went the other way across the board. The S&P 500 fell 40.70 points, or 0.5%, to 7,745.06; the Dow dropped 272.63 points, or 0.5%, to 53,459.78; and the Nasdaq eased 84.25 points, or 0.3%, to 26,644.91. The pound traded around $1.35 on Friday, so sterling-based holders saw little currency effect either way.

The week's biggest movers

Nebius Group was the week's most spectacular mover, jumping 34% on Wednesday after second-quarter revenue of $582m came in 454% higher than a year earlier. Revenue from its core AI cloud business rose sixfold to $575m, adjusted EBITDA of $236m compared with a $21m loss a year earlier, and it closed four AI cloud deals with an average contract value above $1bn each.

CoreWeave rose 19% on the same session. Second-quarter revenue of $2.58bn was up 112% year on year, the adjusted loss per share of $1.03 was narrower than the $1.20 expected, and the revenue backlog reached $104bn — around £77bn. Management also lifted planned 2026 capital expenditure to between $35bn and $39bn, from $31bn to $35bn.

SanDisk gained about 12% on Thursday after an investor day at which management set out long-term targets for the 2028 to 2030 financial years: revenue growth in the mid-to-high teens, non-GAAP gross margins near 80%, operating margins near 75%, and a commitment to return all excess cash to shareholders. The presentation lifted the wider memory complex, including Micron.

Reddit jumped 15% on Friday, according to Forbes, after S&P Dow Jones Indices said it would join the S&P 500 before the open on Tuesday 18 August. Index inclusion forces tracker funds to buy, and Reddit becomes only the second pure-play social media company in the benchmark after Meta.

Cisco was the Dow's problem child, falling about 8% on Thursday to $113.47 despite beating on both earnings and guidance. Broadcom closed at $393.05 on Friday, down 5.93% on the day, after a Bank of America note flagged that its chip-financing vehicle could carry $370bn of senior debt by mid-2029 — debt owed by the vehicle rather than by Broadcom itself, but enough to unsettle holders. On Holding, the Swiss running-shoe maker listed in New York, had its worst day on record on Tuesday, down more than 20% after missing second-quarter revenue expectations and guiding lower. Chevron was among the Dow's better performers as crude climbed.

Company news in focus

Intel dominated the corporate calendar. On Monday 10 August it announced a share sale that it then upsized to $20bn — about £14.8bn — priced at $95 a share, well above the $15bn originally targeted. The stock fell 4.1% that day on the dilution, before the offering closed on 12 August for net proceeds of roughly $19.7bn. The US government, which took a stake of about 10% last year, remains Intel's largest shareholder.

Teledyne Technologies agreed on 10 August to buy Varex Imaging, a maker of X-ray tubes and photon-counting detectors, for $1.1bn in cash. Varex holders receive $18.90 a share, a premium of 52.3% to the previous close. Both boards approved unanimously and the deal is expected to close in early 2027.

The Reddit index change had a corporate cause on the other side: AvalonBay Communities leaves the S&P 500 because of its all-stock merger of equals with Equity Residential, agreed in May and approved by AvalonBay shareholders on 12 August. The combination creates a roughly $69bn landlord to be called Vivmark Residential, controlling more than 180,000 rental units.

Home Depot announced on 12 August that chief executive Ted Decker had begun a temporary medical leave expected to last some months. Senior executive vice-president Ann-Marie Campbell takes day-to-day operations, chief financial officer Richard McPhail takes financial oversight and the professional-customer subsidiaries, and lead independent director Greg Brenneman chairs the board in the interim.

Elsewhere, AppLovin fell around 5% on Tuesday after Bank of America cut it to neutral, citing increased risk to its revenue growth forecast. Alphabet dropped 3.8% the same day — a fourth losing session in five following its reorganisation of its artificial-intelligence divisions — and dragged communication services down more than 2%, the worst S&P 500 sector that day. And Strategy, the bitcoin-holding software company formerly called MicroStrategy, disclosed the sale of 1,690 bitcoin for $108.6m at an average $64,262 a coin, below its $75,385 average cost. The shares fell 8.6% over the week as bitcoin slid below $63,000.

Earnings in focus

A note on American convention: US companies report quarterly rather than half-yearly, and many run fiscal years that do not match the calendar, so a "fourth quarter fiscal 2026" can land in mid-August. Results are released outside market hours, and the after-hours reaction often differs from the next day's close.

Cisco reported fiscal fourth-quarter results after the close on Wednesday 12 August: revenue of $17.3bn, up 18% year on year, GAAP net income of $3.9bn or 97 cents a share — a 51% rise — and non-GAAP earnings of $1.22 a share against $1.17 expected. Guidance for the current quarter of $18.0bn to $18.2bn comfortably exceeded the $16.8bn average estimate. Shares still fell about 8% the next day: non-GAAP gross margin dropped 2.1 percentage points as lower-margin AI hardware took a bigger share of the mix, and the stock had already risen more than 60% this year.

Applied Materials posted record third-quarter revenue of $9.12bn, up 25%, with non-GAAP earnings of $3.50 a share and record operating cash flow of $3.04bn. It returned $860m to shareholders through $440m of buybacks and $420m of dividends. The shares fell around 4% on Friday, with attention on China falling to roughly 28% of sales from about 35% a year earlier, and the chip-equipment complex dragged the Dow lower with it.

Super Micro Computer reported fiscal fourth-quarter net sales of $11.1bn against $5.8bn a year earlier, with gross margin of 17.5% versus 9.5% and net income of $1,178m versus $195m. Diluted earnings were $1.62 a share on a GAAP basis and $1.70 adjusted. It guided to 2027 revenue of $65bn to $72bn on a record backlog above $60bn, and the shares rose about 9% on Wednesday.

Axon Enterprise, which reported on 5 August, kept climbing through the week, adding roughly 15%. Second-quarter revenue of $904m was up 35%, and management raised full-year revenue growth guidance to 32%–34% from 30%–32%, citing $15.1bn of future contracted bookings.

Sectors in focus

Energy led the S&P 500 sectors, rising more than 6% as crude climbed on the Hormuz impasse. Healthcare, technology and financials each added more than 1%. Communication services was the clearest laggard, hurt by Alphabet.

The more interesting split was within technology. Memory and storage names rallied on SanDisk's targets, with Micron pulled along, while the AI-financing side of the trade wobbled: Broadcom's slide came from a note about balance-sheet structure rather than demand, and Applied Materials fell on a record quarter.

Concentration remains the structural point for anyone holding an S&P 500 tracker. The Magnificent Seven accounted for 33.9% of the index in August, according to research compiled by The Motley Fool, against 12.4% eight years earlier. That is why the Russell 2000's 3.15% weekly gain and the S&P 500's 0.4% can sit in the same week: when the megacaps pause, the cap-weighted index pauses with them.

Macro and the Fed

The direction of the American rate debate is worth spelling out, because it runs opposite to the one UK investors have been following. The Federal Reserve is not weighing cuts. It held its target range at 3.50%–3.75% on 29 July, but three regional presidents — Lorie Logan of Dallas, Beth Hammack of Cleveland and Neel Kashkari of Minneapolis — dissented in favour of a quarter-point increase, the most dissents since September 2016. In Fed language a dissent is a formal vote against the majority, and three of them is a loud signal.

Last week's data pulled the other way. July CPI at 3.4% and flat producer prices cut the market-implied probability of a September hike to 42%. Initial jobless claims rose 9,000 to 209,000 in the week to 8 August, above the 202,000 expected, while continuing claims fell 22,000 to 1,777,000. Retail sales fell 0.6% against expectations of a 0.1% rise, with petrol stations down 0.9% and car dealers down 2%. The University of Michigan's preliminary August sentiment index dropped to 51 from 55.2, below the 54.5 expected, with current conditions at 51.8 and expectations at 50.6.

The bond market was less impressed by the inflation relief than the equity market. The Treasury sold $25bn of new 30-year bonds at 5.216%, the highest yield at such an auction since 2001, and by Monday the 30-year was at 5.31%, the highest since 2007. Brent crude ended Friday above $88, more than 5% higher on the week, and traded near $91.50 on Monday.

Still to come

The retail reports are the immediate test of Friday's weak sales figure, and the FOMC minutes will show how close the July meeting came to a hike. With no policy meeting in August, Jackson Hole is the next scheduled opportunity for the Fed chair to address expectations before September.

This article is for information and education only. It is not financial advice or a recommendation to buy, sell or hold any investment. Always do your own research.