Market Snapshot August 13th 2026

CPI Lands Exactly on Consensus and the AI Infrastructure Trade Takes Over — but Real Wages Are Now Negative

Data:

Main Theme: “In Line Is Enough” — July CPI printed at +0.1% headline and +0.2% core, matching consensus on every line, with annual core easing to 2.5% — the lowest since February. That was sufficient to keep the “no need to hike” narrative intact, and the AI infrastructure complex did the rest: CoreWeave rose nearly 20%, Nebius jumped double digits, and the memory complex added 4–5% across the board.

Wednesday delivered the cleanest macro outcome available. Headline CPI rose 0.1% month-on-month after June’s 0.4% decline — the first drop in six years — taking the annual rate to 3.4% from 3.5%. Core rose 0.2% after being flat in June, with the annual rate at 2.5%, down from 2.6% and the lowest since February. Every figure matched the Dow Jones consensus. Treasury yields fell on the release and stock futures rose.

But the equity response was narrow rather than broad. The S&P gained 0.26% to 7,748.50 and the Nasdaq 0.54% to 26,588.49, while the Dow actually slipped 0.04%. The gains were concentrated almost entirely in AI infrastructure — Tuesday night’s CoreWeave and Supermicro results propagating through the entire supply chain. The dollar reversed its post-CPI decline and closed higher; the yield curve steepened.

🟩 U.S. Equities | A Narrow Advance

Index Closing Level Net Points Change % Session Stance
Nasdaq Composite 26,588.49 🟩 +143.04 +0.54% Led — AI infrastructure carried the tape
S&P 500 7,748.50 🟩 +20.30 +0.26% Recovered most of two days of losses
Dow Jones Industrials 53,770.27 🟥 −21.58 −0.04% Lower — no participation in the AI move
Opening move — — Nasdaq +0.9%, S&P +0.5% Faded through the session

 

The concentration is the story. The Nasdaq opened up 0.9% and the S&P 0.5% on the CPI release; both gave back roughly half of that by the close, and the Dow finished negative. This was not a broad relief rally on inflation — it was a sector rally on Tuesday night’s earnings that happened to occur on a benign CPI day.

The AI infrastructure complex moved as a single block:

Outside AI: Cava Group jumped almost 12% on Q2 EPS of $0.19 against an LSEG consensus of $0.18 and revenue of $368.4 million versus $361 million expected.

Positioning context worth recording. Fundstrat noted that 87% of S&P 500 companies reporting this season have beaten estimates. The index has notched roughly 25 record highs in 2026 and is up 13.7% year-to-date, with around two-thirds of S&P members outperforming the index itself — and a Bank of America survey showing the most bullish investor positioning since 2021.

📰 Macro “Red News” | CPI Exactly on Consensus

Measure July actual Consensus Prior
Headline CPI (MoM) +0.1% +0.1% −0.4% (first decline in six years)
Headline CPI (YoY) 3.4% 3.4% 3.5%
Core CPI (MoM) +0.2% +0.2% 0.0% (unchanged)
Core CPI (YoY) 2.5% 2.5% 2.6% — lowest since February
Shelter (MoM) +0.1% — ~two-thirds of the monthly all-items increase
Food (MoM) +0.1% — Food away from home +0.3%
Real average hourly earnings (YoY) −0.2% — Negative

 

The line that deserves the most attention is the last one. Inflation at 3.4% is running above wage growth of 3.2%, and real average hourly earnings fell 0.2% year-over-year. As Heather Long, chief economist at Navy Federal Credit Union, noted, inflation has been wiping out wage gains for four consecutive months — and for middle- and lower-income households that is the operative issue, regardless of what the annual core rate does.

The policy read was immediate and consistent. Reuters framed the print as potentially weakening the argument for a September hike. Morgan Stanley Wealth Management’s Ellen Zentner said in-line inflation keeps intact the “no need to hike rates” narrative that took hold after last week’s jobs report, while noting there is another round of inflation data before the September FOMC. Daiwa said a second straight subdued print likely keeps the Fed sidelined in September, flagging firm medical and airfare costs against housing trends still consistent with a return to 2%.

The dissenters have not moved. Cleveland Fed President Beth Hammack wrote on LinkedIn on Tuesday: “Now is the time to act.” She argued that the longer the Fed waits to bring inflation back to 2%, the more challenging and expensive it becomes. The Fed has held rates since the Iran war began even as central banks in Europe and Japan have raised.

The forward risk is energy, not core. Kiplinger’s David Payne notes oil surged more than 20% in July as talks collapsed, and expects the 12-month inflation rate back near 4% by year-end absent a resolution. July’s CPI captured a crude round trip; August’s will capture Brent sustained near $89.

🟦 Rates and Currency | Yields Fall, Then the Dollar Reverses

Treasury yields declined across the board on the release as rate hike expectations eased, and stock futures rose. But the move faded: US yields closed mixed with a steeper curve, and the dollar reversed its declines to finish higher across the majors — modest but broad-based gains.

That reversal is the session’s most useful technical signal. A genuinely dovish CPI should produce a lower dollar and a lower long end. Instead the curve steepened, which is consistent with a market that accepts the Fed will stay on hold in September but is not convinced the inflation problem is resolved — precisely the configuration that has kept the 30-year near 20-year highs.

🟧 Commodities | Trump Claims Control; the Market Disagrees

Oil remained supported. President Trump told reporters that the US Navy has “100%” control of the Strait of Hormuz and that “It’s open now” — adding that the US was “the only one that has control of the Strait of Hormuz right now.” Markets took the opposite view: both US crude and Brent rose around 2% in early trading.

The substantive obstacle is now quantified, and it is a fee dispute layered on a sovereignty dispute. Per Capital Street FX, the US, Iran and Oman remain locked in negotiations over transit fees: Iran is seeking 5–7% of cargo value, Oman is proposing roughly 3%, and Washington is pushing for none at all. That gap keeps oil, gold and yields sensitive to every headline.

Gold was volatile, finishing lower after an initial rally, consistent with the dollar’s intraday reversal.

🌙 After the Bell | Cisco and Coherent

Coherent (COHR) reported fiscal Q4 and full-year results with a call at 4:30pm ET, entering at $353.68, up 7.64% on the day. Consensus was EPS of $1.62 on revenue of $1.98 billion.

Cisco (CSCO) reported fiscal Q4 after the close, entering at $122.57–123.32, up 2.40%, following a +16.36% post-earnings gain last quarter. Consensus looked for revenue of $16.7–16.9 billion with AI orders above $9 billion, and EPS around $1.17, up roughly 18% year-over-year. Cisco has beaten revenue estimates four straight quarters and in eight of the past ten. Analyst distribution is more balanced at 65% bullish, 4% bearish, with the stock trading against a $132.59 average target.

Cerebras also reported after the bell, and Tencent reported in Asia.

📌 Reading the Session

  1. “In line” was enough, but only just. The market opened up 0.9% on the Nasdaq and gave back half; the Dow closed negative; the dollar reversed higher. A perfectly consensus CPI produced a 0.26% S&P gain. That tells you how much of the “Fed on hold” outcome was already priced after Friday’s payroll contraction.
  2. The real economy datapoint is worse than the market datapoint. Real average hourly earnings are negative 0.2% year-over-year, with inflation at 3.4% exceeding wage growth of 3.2% for a fourth consecutive month. That connects directly to the consumer misses of the past week — The Trade Desk, Under Armour, On Holding.
  3. The AI infrastructure trade is now self-reinforcing across the chain. CoreWeave’s backlog lifted Nebius, Applied Digital, IREN, Lumentum, Coherent, Ciena, Micron, SanDisk and SK Hynix in a single session. Four independent points in the supply chain now disclose multi-year contracted demand — but the concentration risk is rising in proportion.

Thursday: July PPI (forecast +0.2% month-on-month against −0.3% prior) and jobless claims (202K forecast versus 199K). Applied Materials reports after the close with a 4:30pm ET call, and SanDisk holds its Investor Day on fiscal 2027 supply and price floors.

Companies

Theme: “One Backlog Lifted an Entire Chain” — CoreWeave’s $104 billion order book propagated through every layer of the AI supply chain in a single session: neoclouds, optical networking, memory and hosting all rallied together. Then Coherent and Cisco reported into the most demanding expectations of the week.

Wednesday demonstrated how tightly coupled the AI complex has become. CoreWeave did not report on Wednesday — it reported Tuesday evening — yet its backlog disclosure was the dominant driver of Wednesday’s equity market. Nebius, Applied Digital, IREN, Lumentum, Coherent, Ciena, Micron, SanDisk and SK Hynix all rose on the same information. That is a coherent supply-chain response, and it is also a concentration risk: the entire complex is now trading off a small number of contracted-demand disclosures.

⚡ 1. CoreWeave: The After-Hours Move Held and Extended

CoreWeave (CRWV) rose nearly 20% in Wednesday’s cash session, extending Tuesday’s after-hours gain rather than fading it.

Why that matters more than the percentage. The stock had fallen after each of its previous five earnings reports, averaging a 17% decline across the last four. After-hours moves of this magnitude routinely reverse in the following session. This one did not — it doubled. That is a genuine break in a well-established pattern and suggests the re-rating is being driven by new institutional money rather than short covering.

The disclosed numbers: revenue up 112.5% year-over-year to $2.58 billion, a $104 billion revenue backlog, and more than $25 billion added early in the current quarter — which is not included in that backlog figure. CEO Michael Intrator cited “unprecedented demand” for CoreWeave Cloud and said customer demand is accelerating as enterprise adoption broadens.

Dan Ives named CoreWeave and Cisco as “pieces of the puzzle” for whether the AI momentum trade carries into Nvidia’s report on 26 August.

The unresolved item remains funding. Q1 showed $7.7 billion of capital expenditure against negative $4.71 billion of free cash flow. A $104 billion backlog establishes demand; it does not establish that the capacity to serve it can be financed without dilution or leverage.

☁️ 2. Nebius: The Second Confirmation

Nebius Group (NBIS) jumped more than 12.5% after reporting better-than-expected EBITDA and revenue versus FactSet consensus, with gross margins also stronger than estimates — and reports indicated the gain extended toward 34% as AI demand commentary was digested.

Nebius is the cleanest independent check on CoreWeave. It is a directly comparable neocloud, competing for the same workloads from the same customers. Two neoclouds reporting accelerating demand within twenty-four hours is materially stronger evidence than one — particularly given that Nebius previously signed a landmark capacity agreement with Meta worth $12 billion in services through 2027 plus a potential $15 billion over five years.

Applied Digital and IREN, both AI hosting names, moved higher on the same read-through.

🔦 3. Optical Networking: The Bottleneck Trade

Lumentum (LITE) gained after fiscal Q4 revenue more than doubled to $1.01 billion. Coherent (COHR) rose 7.6–8.8% to about $353.68 and Ciena (CIEN) jumped in sympathy.

The structural logic is sound. As AI cluster scale expands, data transmission speed and bandwidth between servers has become one of the critical bottlenecks in AI infrastructure. Orders and guidance from Lumentum and Coherent are therefore a direct read on whether the data-centre buildout cycle is still accelerating — and Lumentum’s doubling of revenue answers that affirmatively from the supply side.

But the positioning in Coherent is the most extreme on the calendar, and it reported into that Wednesday evening. The specific risks flagged ahead of the print:

💾 4. The Memory Complex Rejoins the Rally

The Roundhill Memory ETF rose 4%, with SanDisk +5%, Micron +5% and SK Hynix +5%.

This is a notable reversal. SanDisk fell roughly 10% across 5–6 August after reporting an 84.6% gross margin driven substantially by $2.01 billion of price-led sequential growth; Western Digital fell about 10% on a beat-and-raise; Kioxia dropped 10% in Tokyo on the read-through. CoreWeave’s multi-year Solidigm agreement for priority enterprise SSD capacity, announced Tuesday, reframed memory scarcity as a demand signal rather than a margin risk.

The date that settles this is Thursday: SanDisk’s Investor Day, covering fiscal 2027 supply, contract conversion and price floors. That is the event that determines whether the 84.6% margin is a cycle peak or a durable baseline.

🌐 5. Cisco: The Established Business Reports

Cisco (CSCO) entered at $122.57–123.32, up 2.40%, having gained 16.36% after its previous quarterly report.

Consensus: revenue of $16.7–16.9 billion, AI orders above $9 billion, and EPS around $1.17, up roughly 18% year-over-year. The company has beaten revenue estimates four straight quarters and eight of the past ten. Its analyst distribution is more measured than Coherent’s at 65% bullish and 4% bearish, against a $132.59 average target.

Cisco is the least speculative read on AI networking demand available. Unlike the neoclouds it has decades of enterprise revenue as a baseline, so the AI order line can be assessed against a stable business rather than as the entire thesis. Technically the stock was testing $119.65 support with a descending trendline capping upside near $124.62 ahead of the report.

🥗 6. Outside the AI Complex

📌 Analyst Take

The AI supply chain has now produced five independent confirmations of contracted demand in eight sessions: Microsoft’s $678 billion RPO, Amazon’s $496 billion AWS backlog, CoreWeave’s $104 billion plus $25 billion, Supermicro’s $60 billion order book, and Nebius’s beat on EBITDA, revenue and margins. The “speculative capex” thesis is now very difficult to defend on the evidence.

Two risks are accumulating in its place. The first is funding: CoreWeave burned $4.71 billion of free cash flow against $7.7 billion of capex in Q1, and Nvidia’s $500 billion asset-manager financing structure drew no share price reaction on Monday. The market has moved from questioning demand to questioning how the capacity gets paid for.

The second is correlation. On Wednesday, nine separate names across four sub-sectors moved on one company’s backlog disclosure. A complex that rallies together on a single datapoint will also fall together on a single disappointment — and the calendar concentrates that risk: Applied Materials Thursday (up roughly 110% in 2026, 10.4% implied move), SanDisk’s Investor Day the same day, and Nvidia on 26 August.

The name most exposed to that dynamic reported Wednesday evening. Coherent trades above 42x forward earnings and 7x sales after a 200%-plus twelve-month surge, with 77% bullish and 0% bearish analyst positioning, an implied move near 15%, and a history of falling after three of its last four EPS beats. By every measure this season has established, that is the profile that gets sold on good news.

General

Wednesday, August 12th, 2026: The Inflation Question Is Settled for September — and Nothing Beyond It

July CPI matched consensus on all four headline measures, with annual core at 2.5%, the lowest since February. Combined with Friday’s payroll contraction, that is enough to keep the Federal Reserve sidelined at the 15–16 September meeting on almost every sell-side read. But the market’s reaction was strikingly restrained — the Nasdaq gave back half its opening gain, the Dow closed negative, and the dollar reversed to close higher with a steeper curve.

The reason is that a benign July CPI resolves very little about what comes after September. Brent is back near $89, oil rose 20% in July as talks collapsed, and one respected forecast has the annual inflation rate returning toward 4% by year-end if the Strait stays shut. July’s print captured a crude round trip. August’s will not.

  1. What the Print Actually Established
Question Answer from July CPI Confidence
Will the Fed hike in September? Very likely no High — second consecutive subdued print
Is core inflation trending to 2%? 2.5% and falling, lowest since February Medium — shelter drove two-thirds of the increase
Is the energy shock passing through to core? Not yet — core services contained Low confidence — July captured a round trip
Are households better off? No — real wages −0.2% YoY High
Is the inflation problem solved? No — 3.4% headline, well above target High

 

The composition detail matters. Shelter rose just 0.1% but accounted for roughly two-thirds of the entire monthly all-items increase, which means the rest of the basket was close to flat. Food rose 0.1% with food away from home up 0.3% — the services component of food inflation continuing to run ahead of goods.

Daiwa’s framing is the most precise available: a second straight subdued print likely keeps the Fed sidelined in September, but the bank flagged firm medical and airfare costs against housing trends still consistent with returning to 2%. Two opposing forces inside the same print.

  1. The Household Economy Is Deteriorating Beneath the Index

This is the most important thing in Wednesday’s data and it received the least attention.

Connect this to the labour data and the corporate results and a consistent picture emerges. July payrolls contracted by 23,000 with May and June revised down a combined 103,000, leaving a twelve-month average near 34,000 a month. Average hourly earnings growth has slowed to 3.2%, the lowest since May 2021. And in the past six sessions: The Trade Desk −21% on an advertising miss, Under Armour cutting guidance, On Holding posting its worst day on record.

The equity market’s current premise is that labour weakness is good news because it keeps the Fed on hold. That premise holds only while the weakness stays confined to the policy channel. Negative real wages for four months is the mechanism by which it stops being confined. Friday’s July retail sales print is the direct test.

  1. The Dollar Reversal Is the Session’s Real Signal

Treasury yields fell on the CPI release and stock futures rose. By the close, yields were mixed with a steeper curve and the dollar had reversed to finish higher across the majors.

A genuinely dovish inflation print should weaken the dollar and flatten the curve. The opposite happened. The most coherent explanation is that the market accepts the September hold but does not accept that the inflation problem is resolved — which is exactly what a steeper curve prices, and exactly why the 30-year has remained near 20-year highs through two consecutive benign CPI reports.

The hawkish case has not gone away, and its advocates are unmoved. Cleveland Fed President Hammack wrote on Tuesday: “Now is the time to act,” arguing that delay makes the eventual adjustment more difficult and more expensive. The Fed has held since the Iran war began while the ECB and the Bank of Japan have raised rates — an unusual divergence that is itself a source of pressure on the long end and on the dollar.

  1. The Hormuz Dispute Is Now a Priced Negotiation

For the first time, the gap between the parties has a number attached to it.

Party Transit fee position Implication
Iran 5–7% of cargo value Establishes Iranian authority over the waterway
Oman ~3% of cargo value Mediated compromise, still concedes the principle
United States None at all Freedom of navigation without approvals, tolls or controls

 

This clarifies why five separate rounds of optimism have failed. The dispute is not about the level of a fee — it is about whether any fee exists, because a fee is an acknowledgement of sovereignty over the Strait. Washington cannot concede the principle without conceding the war’s central question.

Wednesday added a rhetorical escalation. Trump told reporters the US Navy has “100%” control of the Strait and that “it’s open now.” The market’s verdict was immediate: both crude benchmarks rose around 2%. When the President declares a chokepoint open and oil rallies, the price is telling you what the shipping data already shows.

The forward inflation risk sits here, not in the CPI basket. Oil rose more than 20% in July as talks collapsed. Kiplinger’s David Payne expects the twelve-month inflation rate back near 4% by year-end absent a standing resolution. August CPI will capture Brent sustained near $89 with no round trip to offset it.

  1. Concentration Is Now the Market’s Structural Risk

The positioning data deserves to be stated plainly, because it is unusually stretched.

The last point is genuinely encouraging — breadth is better than in previous AI-driven phases. But Wednesday illustrated the offsetting risk: nine names across four sub-sectors — neoclouds, optical, memory, hosting — all moved on one company’s backlog disclosure. The complex is tightly correlated on the way up, which means it will be tightly correlated on the way down.

The calendar concentrates that risk into a short window. Applied Materials reports Thursday, up roughly 110% in 2026 with a 10.4% implied move. SanDisk’s Investor Day the same day addresses whether memory pricing power is durable. Nvidia reports 26 August, and as one analysis put it, if Nvidia or Micron disappoints, the effect ripples across the whole market.

📊 Global Macro Sentiment Summary — Wednesday, August 12th, 2026

Narrative Channel Core Fundamental Trigger Net Portfolio Posture
Inflation CPI +0.1% MoM / 3.4% YoY; core +0.2% / 2.5% — all in line; core lowest since February 🟩 September hike very unlikely
Household economy Real average hourly earnings −0.2% YoY; inflation 3.4% > wages 3.2% for a fourth month 🟥 Deteriorating
Index Structure S&P +0.26% to 7,748.50; Nasdaq +0.54% to 26,588.49; Dow −0.04% 🟨 Narrow advance
Rates and FX Yields fell on release, closed mixed with a steeper curve; dollar reversed higher ⚠️ Not a dovish endorsement
Fed commentary Hammack: “Now is the time to act”; Zentner and Daiwa see September hold 🟨 Divided, hold likely
AI infrastructure CoreWeave +~20%; Nebius +12.5%+; Lumentum revenue doubled; memory complex +4–5% 🟩 Five confirmations of contracted demand
AI funding CoreWeave Q1: $7.7bn capex vs −$4.71bn FCF; Nvidia $500bn structure drew no reaction ⚠️ The live question
Energy Trump claims “100%” control and strait “open”; crude rose ~2%; fee gap 5–7% vs 3% vs zero 🟥 Unresolved, forward inflation risk
Positioning ~25 record highs YTD; most bullish BofA survey positioning since 2021; 87% beat rate ⚠️ Stretched
Breadth Two-thirds of S&P members outperforming the index 🟩 Better than prior AI phases

 

Upcoming News

Thursday, August 13th, 2026 — Theme: “PPI Completes the Picture, SanDisk Settles the Memory Question” — Wholesale inflation lands with a forecast rebound to +0.2% after June’s −0.3%, jobless claims follow a 199,000 print, and the session’s two most consequential corporate events both address AI hardware: Applied Materials’ results and SanDisk’s Investor Day on fiscal 2027 supply and price floors.

Thursday is the second of three inflation-adjacent releases this week and the one that feeds most directly into the Fed’s preferred gauge. PPI is the pipeline read: it captures wholesale pressures that flow into core PCE later in the month. With July CPI already in line and a September hold broadly assumed, the market’s attention has shifted to whether the energy re-escalation — Brent near $89 after a 20% July advance — is showing up upstream before it reaches consumers.

🔴 Calendar — Thursday, August 13th, 2026

Time (ICT) Currency Event / Indicator Consensus Impact
Morning NZD RBNZ Inflation Expectations — 🟠 Med
19:30 USD July PPI (MoM) +0.2% (prev −0.3%) 🔴 High
19:30 USD July Core PPI (MoM) ~+0.2% 🔴 High
19:30 USD Initial Jobless Claims (wk ended Aug 8) 202K (prev 199K) 🟠 Med
19:30 USD Continuing Claims — 🟠 Med
Day — SanDisk Investor Day — FY27 supply, contract conversion, price floors — 🔴 High
After close — Applied Materials (AMAT) — FQ3 2026; call 4:30pm ET — 🔴 High
After close — Brookfield, NetEase, Nu Holdings, RWE, Adyen, Orsted — 🟠 Med

 

  1. PPI — The Pipeline Read Into Core PCE

Consensus is +0.2% month-on-month after a −0.3% reading in June. Core PPI is expected around +0.2%.

Why this matters more than a typical PPI print. Producer prices feed the components used to construct core PCE, the Fed’s preferred inflation measure, later in the month. Bank of America has forecast core PCE at +0.24% month-on-month and 3.3% year-over-year — a level it reads as supporting a September hike — even while forecasting the softest core CPI since January. That CPI–PCE divergence has run all year and is a substantial part of why the FOMC split 9–3 on 29 July, in the first three-way same-direction dissent since September 2016.

The specific thing to look for is energy pass-through. Brent rose more than 20% during July as negotiations collapsed and sits near $89 now. CPI showed the consumer-level effect was muted in July because crude round-tripped within the month. PPI captures producer-level costs with less lag and less smoothing. If wholesale energy and transport costs are running hot while consumer prices are not, that is a margin compression signal for corporates and a forward inflation signal for the Fed.

Jobless claims at a 202,000 forecast against 199,000 are a secondary release but worth watching for continuation: the four-week average fell to 198,750 last week, and Challenger layoffs in July were the lowest in two years at 33,429. A frozen labour market with low layoffs and negative payroll growth is an unusual combination that neither the hawks nor the doves can claim cleanly.

  1. SanDisk Investor Day — The Memory Question Settled

This is arguably the most consequential scheduled event of the week for anyone with semiconductor exposure.

The problem SanDisk must address. Its fiscal Q4, reported 5 August, showed revenue of $8.97 billion beating by 5.7%, adjusted EPS of $39.25 beating by 12.3%, and an 84.6% gross margin. But roughly $2.01 billion of the sequential revenue gain came from pricing rather than volume, and Q1 guidance of $10.3–10.8 billion disappointed at the midpoint. The stock fell about 10% across two sessions.

The Investor Day agenda is precisely the right one: fiscal 2027 supply, contract conversion and price floors. Those three items determine whether an 84.6% margin is a cycle peak that mean-reverts or a new structural baseline supported by contracted pricing.

The read-through is wide. SanDisk rose 5% on Wednesday alongside Micron and SK Hynix, both up 5%, and the Roundhill Memory ETF up 4%. Kioxia manufactures NAND jointly with SanDisk in Japan and fell 10% on its guidance last week. Apple cut its own guidance on 31 July citing memory and component availability. This single presentation moves the entire memory complex in both hemispheres.

  1. Applied Materials — The Most Exposed Report of the Week

Applied Materials (AMAT) reports fiscal Q3 2026 after the close with a confirmed 4:30pm ET call.

The setup fits the profile that has been sold repeatedly this season. The stock is up roughly 110% in 2026, one of the best-performing chip names of the year, with options pricing a 10.39% implied move. Every large year-to-date gainer that has reported since late July has fallen on good news: AMD (+140%) −8% on 107% data-centre growth; SanDisk (+400%) −10% on a 12% beat; Western Digital (+220%) −10% on a beat-and-raise; Datadog (nearly doubled) −17% on a beat-and-raise.

What to watch in the substance: demand for advanced logic chips, DRAM, HBM-related equipment and advanced packaging. Applied Materials sits one layer further upstream than the memory makers — it sells the equipment that produces the capacity. If HBM and advanced packaging orders are accelerating, that corroborates the SanDisk and Micron pricing story from the capital equipment side; if bookings are flat, it suggests the memory shortage resolves faster than current pricing implies.

  1. Carry-Over From Wednesday
  1. The Road to September
Date Event Why it matters
Fri 14 Aug July retail sales; UMich preliminary sentiment The consumer test after four months of negative real wages
19 Aug July FOMC minutes First three-way same-direction dissent since September 2016
25 Aug Consumer Confidence; new home sales —
26 Aug Q2 GDP second estimate (advance: 1.5%); Nvidia earnings, 5:00pm ET The single largest single-stock event of the quarter
27–29 Aug Jackson Hole — Warsh’s first address as Chair Framework after the Fed dropped forward guidance
4 Sept August payrolls Confirmation test for July’s −23,000
15–16 Sept FOMC decision and dot plot A hold is now the strong base case

 

Friday’s retail sales deserve elevation above their usual weight. June spending rose 0.2%, and much of the spring increase came from higher fuel prices that have since partially reversed. With real wages negative for four consecutive months and three consumer-facing misses in the past week, this is the release most likely to challenge the current equity framing.

Snapshot

Wednesday, August 12th, 2026 — Theme: “Consensus Delivered” — July CPI matched forecasts on all four measures with annual core at a six-month low of 2.5%, effectively removing a September hike. The AI infrastructure complex rallied as a block on CoreWeave’s $104 billion backlog, but the Dow closed negative and the dollar reversed higher.

Wednesday resolved the near-term policy question and left everything beyond it open. Headline CPI rose 0.1% to 3.4% annually, core rose 0.2% to 2.5% — the lowest since February — and every figure matched consensus. Morgan Stanley’s Ellen Zentner summarised the consequence: in-line inflation keeps intact the “no need to hike rates” narrative that took hold after Friday’s jobs report. But the equity response was narrow, the Dow finished lower, and the dollar closed higher with a steeper curve — a market accepting the hold without accepting that inflation is beaten.

🏛️ The Bottom Line

The S&P 500 rose 0.26% to 7,748.50 and the Nasdaq Composite added 0.54% to 26,588.49, while the Dow slipped 21.58 points (−0.04%) to 53,770.27. Both indices opened materially stronger — Nasdaq +0.9%, S&P +0.5% — and gave back roughly half of that through the session.

July CPI came in exactly on consensus. Headline rose 0.1% month-on-month after June’s 0.4% decline — the first drop in six years — putting the annual rate at 3.4%, down from 3.5%. Core rose 0.2% after being unchanged in June, with the annual rate at 2.5% from 2.6%, the lowest since February. Shelter rose 0.1% but accounted for roughly two-thirds of the monthly all-items increase. Food rose 0.1%, with food away from home up 0.3%.

The household detail was poor. Real average hourly earnings fell 0.2% year-over-year, with inflation at 3.4% running above wage growth of 3.2%. Navy Federal’s Heather Long noted inflation has been wiping out wage gains for four consecutive months.

Treasury yields fell on the release, then closed mixed with a steeper curve, and the dollar reversed its declines to finish higher across the majors. Cleveland Fed President Beth Hammack had written the previous day: “Now is the time to act.” Daiwa said a second straight subdued print likely keeps the Fed sidelined in September, flagging firm medical and airfare costs against housing trends consistent with 2%.

The AI infrastructure complex rallied as a single block on Tuesday night’s CoreWeave and Supermicro results. CoreWeave rose nearly 20%, extending rather than fading its after-hours move, on a $104 billion backlog with more than $25 billion added early in the current quarter. Nebius Group jumped more than 12.5% on better-than-expected EBITDA, revenue and gross margins. Lumentum gained after fiscal Q4 revenue more than doubled to $1.01 billion; Coherent rose 7.6–8.8% to about $353.68 and Ciena jumped. The Roundhill Memory ETF rose 4%, with SanDisk, Micron and SK Hynix each up 5%. Applied Digital and IREN also advanced. Outside AI, Cava Group jumped almost 12% on an earnings and revenue beat.

Oil stayed supported despite a presidential claim to the contrary. Trump said the US Navy has “100%” control of the Strait of Hormuz and that “it’s open now” — both crude benchmarks rose around 2%. The transit-fee dispute is now quantified: Iran seeks 5–7% of cargo value, Oman proposes roughly 3%, and Washington is pushing for none. Gold was volatile and finished lower after an initial rally.

After the close, Coherent and Cisco reported. Coherent entered with an implied move near 15%, trading above 42x forward earnings and 7x sales after a 200%-plus twelve-month surge, with 77% bullish and 0% bearish analyst positioning and a record of falling after three of its last four EPS beats. Cisco entered at about $122.57–123.32, with consensus at $16.7–16.9 billion revenue, AI orders above $9 billion and EPS near $1.17. Cerebras also reported.

📉 Reference Levels for the Thursday Open (August 13th)

Derived from recent session closes and range extremes — not vendor-published levels. Verify against your own charts.

Asset Support Resistance Operational Bias
S&P 500 7,728 → 7,700 7,753 → 7,757.64 (record) 🟨 Just below the record
Nasdaq Composite 26,445 → 26,348 26,690 → 27,000 🟩 Leading on AI
Dow Jones 53,770 → 53,178 54,349 → 54,744 (records) 🟥 No AI participation
Russell 2000 2,946 3,027 → record zone 🟩 +22% YTD
US 10Y Yield 4.55% → 4.50% 4.70% → 4.73% 🟨 Curve steepening
US 30Y Yield 5.10% Near 20-year highs ⚠️ Unresolved
Brent Crude $87 → $83.55 $90 → $90.12 🟩 Fee dispute unresolved
WTI Crude $80 → $78 $83.20 → $84.67 🟩 Supported
Gold (spot) $4,299 → $4,223 $4,343 → $4,430 🟨 Reversed lower

 

📊 Market Sentiment & Bias

Inflation: 🟩 Enough for September, not enough for the year. Core at 2.5% is the lowest since February and both prints have now been subdued. But headline sits at 3.4% against a 2% target, shelter drove two-thirds of the increase, and August CPI will capture Brent near $89 without a round trip to offset it.

Households: 🟥 The deteriorating variable. Real average hourly earnings −0.2% year-over-year, with inflation exceeding wage growth for four consecutive months.

Equities: 🟨 Narrow. The Dow closed negative on a benign CPI day. The advance was an AI supply-chain rally that coincided with the print rather than a broad relief rally.

Rates and FX: ⚠️ Not a dovish endorsement. Yields fell on release then closed mixed with a steeper curve; the dollar reversed higher. The market accepts a hold without accepting that inflation is resolved.

AI demand: 🟩 Five independent confirmations. Microsoft $678bn RPO, Amazon $496bn, CoreWeave $104bn plus $25bn, Supermicro $60bn, Nebius beat on EBITDA, revenue and margin. The speculative-capex thesis is very hard to defend now.

AI funding and correlation: ⚠️ The two live risks. CoreWeave ran $7.7bn capex against −$4.71bn free cash flow in Q1. And nine names across four sub-sectors moved on one backlog disclosure — correlation that cuts both ways.

Positioning: ⚠️ Stretched. Roughly 25 record highs in 2026, up 13.7% year-to-date, with the most bullish Bank of America survey positioning since 2021 — though two-thirds of index members are outperforming, which is healthier breadth than prior AI phases.

💡 Top Trade Takeaway: “The Demand Question Closed. The Funding and Consumer Questions Opened.”

Focus: Retain AI supply-chain exposure where contracted backlog is disclosed, but manage the correlation — this complex now moves as one block. Avoid the year’s largest gainers reporting into Thursday. Treat energy as the forward inflation risk rather than a resolved one. Elevate consumer-facing exposure to a live review ahead of Friday’s retail sales.

Logic. Wednesday closed the two questions that have dominated since late July and opened two others. On inflation, a second consecutive in-line print with core at a six-month low removes September from the table on virtually every sell-side read. On AI demand, five independent confirmations of contracted multi-year demand across four layers of the supply chain make the speculative-capex thesis very difficult to sustain.

What replaces them is more difficult to hedge. The first is funding: CoreWeave burned $4.71 billion of free cash flow against $7.7 billion of capex in Q1, and Nvidia’s $500 billion asset-manager financing structure drew no share price reaction on Monday. Demand being contracted does not mean the capacity to serve it can be financed cheaply.

The second is the household economy, and it is the one the market is least positioned for. Real wages are negative 0.2% year-over-year with inflation above wage growth for four straight months. In the past six sessions, The Trade Desk fell 21% on an advertising miss, Under Armour cut guidance, and On Holding posted its worst day on record. The entire equity framing — that weak labour data is good because it keeps the Fed on hold — requires that weakness never reaches revenues. Friday’s retail sales is the direct test, and it has become the most important release of the week.

The tactical caution for Thursday is unchanged from the pattern of the last three weeks: Applied Materials is up roughly 110% in 2026 with a 10.4% implied move, and every large year-to-date gainer that has reported since late July has been sold on good news. Coherent, reporting Wednesday evening at above 42x forward earnings with 77% bullish and 0% bearish positioning, is the same trade one day earlier.

Calendar discipline: PPI and jobless claims Thursday 19:30 ICT; SanDisk Investor Day on fiscal 2027 supply and price floors, the week’s most consequential scheduled semiconductor event; Applied Materials after the close; retail sales Friday; FOMC minutes 19 August; Q2 GDP second estimate and Nvidia earnings 26 August; Jackson Hole 27–29 August; FOMC 15–16 September.

The report belongs to The Concept Trading and Van Hung Nguyen

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