Market Snapshot August 14th 2026

PPI Comes In Flat and the S&P Clears 7,800 for the First Time — but Cisco, Cerebras and Coherent All Beat and Were Sold

Data:

Main Theme: “Cooler Wholesale Prices, Colder Earnings Reception” — July PPI came in flat against a +0.2% forecast, with annual producer inflation cooling to 4.7% from 5.5%. That drove the S&P 500 to a record close above 7,800 and the Russell 2000 to its 27th record of the year. Yet Cisco fell 8.77%, Cerebras 11–12% and Coherent roughly 6–8% — all three after beating expectations.

Thursday delivered a second consecutive benign inflation print and a third consecutive session in which strong AI earnings were sold. Headline PPI was unchanged month-on-month versus a +0.2% consensus, with the annual rate falling to 4.7% from 5.5%; core PPI rose 0.2%, matching forecasts, at 4.2% year-over-year. Money markets moved to price less than a 40% chance of a September hike. The S&P 500 rose 0.65% to a record 7,798.99, clearing 7,800 intraday for the first time, while the Nasdaq gained 0.81% to 26,803.03 and the Dow added 69.72 points.

The contradiction sits in the earnings. Cisco, Cerebras and Coherent all reported results that beat Wall Street estimates and all three fell hard. Cisco was the Dow’s worst performer at −8.77%. Then after the close, Applied Materials beat and guided fourth-quarter revenue $700 million above consensus while citing “unprecedented demand” — and fell 3.14% in extended trading. That is now four consecutive weeks in which the largest year-to-date gainers have been sold on good news.

One bond market signal deserves flagging. Even as Treasuries rallied on the data, the US sold 30-year bonds at the highest rate in a quarter of a century — a direct measure of the compensation investors now demand to finance the deficit, and a reminder that the long end has not participated in this week’s disinflation story.

🟩 U.S. Equities | A Record on Soft Data, Despite the Earnings

Index Closing Level Net Points Change % Session Stance
S&P 500 7,798.99 🟩 +50.49 +0.65% Record close — first time above 7,800
Nasdaq Composite 26,803.03 🟩 +214.54 +0.81% Nearing its own record close
Dow Jones Industrials 53,839.99 🟩 +69.72 +0.13% Held back by Cisco
Russell 2000 ~3,045 🟩 — Record 27th record close of 2026; +22.6% YTD
Nasdaq 100 ~29,743 🟩 — +0.74% to +1.15% Outperformed the composite

 

The small-cap story is now the most striking in the market. The Russell 2000 opened Thursday at an all-time high of 3,045.48, having gained 0.6% on Wednesday to close above its previous peak of 3,036.98 — its 27th record close of 2026. It is up 22.6% year-to-date, outpacing the S&P 500 by roughly 9.4 percentage points (S&P +13.2%, Nasdaq +14.4%, Dow +11.9%). The S&P 500 Equal Weight Index has risen about 15% in 2026 against 13.3% for the cap-weighted index — genuine breadth, not a megacap illusion.

Dow leaders and laggards: Merck +2.00%, Nike +1.90%, Visa +1.51% on the upside; Cisco −8.77%, UnitedHealth −1.57%, McDonald’s −1.23% on the downside.

Volatility hit its 2026 low. The VIX fell over 5% to 14.40 on Wednesday. BTIG technical strategist Jonathan Krinsky noted the market has now reached a record streak of 183 consecutive sessions without an 80%-plus downside-volume day on the NYSE — a measure of how completely selling pressure has been absent.

One corporate headline with broad implications: the Financial Times reported that Anthropic could go public as soon as October, with investors targeting a record valuation of $2 trillion.

📰 Macro “Red News” | PPI Flat, but the Detail Cuts Both Ways

Measure July actual Consensus Prior
Headline PPI (MoM) 0.0% (flat) +0.2% −0.3%
Headline PPI (YoY) 4.7% — 5.5%
Core PPI (MoM) +0.2% +0.2% to +0.3% —
Core PPI (YoY) 4.2% 4.2% —
Initial jobless claims Ticked up WoW 202K 199K
Continuing claims Fell — 1.801m

 

Bill Adams, chief US economist at Fifth Third Commercial Bank, gave the most useful read of the print — and it is not uniformly dovish. He noted headline PPI was cooler than expected on declines in energy prices, food prices and energy-sensitive services such as air and truck transportation. But “core PPI was about as expected, and its details have upward implications for July core PCE” later this month. The specific item: portfolio management services jumped 6.5% on the month and are up 22.5% on the year.

That matters because portfolio management fees flow directly into core PCE, the Fed’s preferred gauge. Deutsche Bank’s Jim Reid had flagged exactly this ahead of the release, identifying health care services, airline tickets and investment management fees as the components to watch precisely because they feed PCE rather than CPI. A soft PPI headline with a hot investment-management component is the configuration that produces a soft CPI and a firm core PCE — which is the divergence that split the FOMC 9–3 on 29 July.

The labour detail was mixed in a constructive direction: first-time filings ticked up week-over-week while continuing claims fell — a coda to last week’s payroll contraction suggesting people are still finding work even as hiring slows.

Two Fed speakers bracketed the release: Cleveland’s Hammack at 8:15am ET — who had written on Tuesday that “now is the time to act” — and Richmond’s Barkin at 8:40am ET. As one strategist put it, it remains to be seen how the Fed under new Chair Kevin Warsh interprets these numbers, and that uncertainty is what markets are still digesting. Fed watchers still expect at least one hike by year-end despite September now being priced below 40%.

🟦 Rates | Yields Ease, but the 30-Year Auction Tells a Different Story

The 10-year Treasury yield edged 1 basis point lower to 4.6704%, with the 2-year — more sensitive to Fed expectations — also lower. Money markets priced less than a 40% probability of a September hike.

The offsetting datapoint is the auction. The US sold 30-year bonds at the highest rate in a quarter of a century. Bloomberg described it as a testament to the compensation investors demand to finance the deficit. This is the third consecutive week in which the front end has rallied on soft data while the long end has refused to follow — the curve keeps steepening, and that is a fiscal and inflation-expectations signal rather than a policy-path signal.

🟧 Commodities | Oil Snaps a Five-Day Advance

WTI fell 1.39% to $82.11, snapping a five-session advance, with Brent slipping from near $88 after a 12% gain over the previous six sessions. Bloomberg reported oil dropping toward $81 late in the day.

Three bearish forces converged:

The rhetoric hardened regardless. Trump said the US has “total control over the Strait of Hormuz” and “We own it,” warning that Iran’s actions will be met with force. The administration disputes private shipping data showing low traffic through the waterway. Talks appear deadlocked with each side hardening, though Pakistan’s defence minister said Washington and Tehran are “close to some sort of arrangement” and reports indicate Iran–Oman talks have reached an advanced stage.

Gold pulled back to around $4,363–4,390 after being rejected at its 200-day moving average near $4,450.

🌙 After the Bell | Applied Materials Beats Big and Falls

Applied Materials (AMAT) fell 3.14% in extended trading to $517.78 despite a comprehensive beat and a substantial guidance raise.

Metric Guidance / actual Versus consensus
Q4 revenue guidance $10.25bn ± $500m vs $9.54bn — roughly $700m above
Q4 adjusted EPS guidance $3.82–4.22 vs $3.69
Q3 consensus (met/beat) Revenue $8.95bn, EPS $3.36 Beat — extends a five-quarter streak
Calendar 2026 outlook Semiconductor Systems revenue expectations raised again Third raise this year
2027 commentary Another “strong growth year” On increased customer visibility

 

Management’s language was unusually direct: the rapid global adoption of AI is driving “unprecedented demand” for its materials engineering solutions, and the company expects to grow faster than the market this year.

The stock fell anyway — and the setup explains why. AMAT closed Wednesday at $548.15 after a 190% gain over twelve months, having recovered from a $436 low. It trades at 32 times forward earnings and 51 times trailing, rich for a cyclical toolmaker. Free cash flow collapsed 80.21% year-over-year to $210 million on a working capital build, with operating cash flow down 46.21%. China still contributes 27% of revenue after a $253 million BIS settlement. Polymarket had put the odds of a beat at 92.5% — the beat was fully expected and fully priced.

📌 Reading the Session

  1. Two benign inflation prints in two days have settled September and nothing else. Money markets price below 40% for a September hike, but Fed watchers still expect at least one hike by year-end, and the 30-year sold at the highest rate in 25 years on the same day. The disinflation is in the near-term data, not in the long-term price of money.
  2. The earnings reaction function has now inverted completely. Cisco, Cerebras, Coherent and Applied Materials all beat. All four fell. Applied Materials guided $700 million above consensus and cited “unprecedented demand” — and dropped 3%. When a beat-and-raise of that magnitude cannot lift a stock, the constraint is valuation and positioning, not fundamentals.
  3. The breadth underneath is genuinely healthy, which cuts against the complacency reading. The Russell 2000 is up 22.6% and at its 27th record of the year; the equal-weight S&P is outperforming the cap-weighted index. But the VIX at 14.40 and 183 sessions without a heavy down-volume day describe a market that has not been tested.

Friday: July retail sales and preliminary University of Michigan sentiment. With real average hourly earnings negative 0.2% year-over-year and three consumer-facing misses in the past week, retail sales is the most important release remaining this week.

Companies

Theme: “Four Beats, Four Selloffs” — Cisco, Cerebras and Coherent all exceeded estimates and fell 6–12%. Applied Materials then guided fourth-quarter revenue $700 million above consensus, cited “unprecedented demand,” and dropped 3% after hours. Meanwhile SanDisk’s Investor Day laid out a memory supercycle running to 2030 and lifted the entire equipment complex.

Thursday produced the most concentrated demonstration yet of this season’s dominant mechanic. Four AI-linked companies reported results that beat Wall Street expectations. All four traded lower. The common denominator is not disappointment — Applied Materials raised guidance by $700 million and Cisco delivered results that “surpassed expectations while highlighting robust demand for AI infrastructure.” The common denominator is that all four had already been repriced for exactly that outcome.

🌐 1. Cisco: The Dow’s Worst Performer on a Beat

Cisco (CSCO) fell 8.77%, the worst performer in the Dow, after quarterly results that surpassed Wall Street expectations and highlighted robust demand for AI infrastructure nonetheless failed to impress investors. The stock had climbed 2.86% during Wednesday’s regular session ahead of the release and had gained 16.36% after its previous quarterly report.

The setup was demanding. Consensus looked for revenue of $16.7–16.9 billion, AI orders above $9 billion and EPS near $1.17, up roughly 18% year-over-year. Cisco had beaten revenue estimates four straight quarters and in eight of the past ten. Technically the stock had rallied to $123.88 testing a descending trendline at $124.62, with analysts positioned at 65% bullish against a $132.59 average target.

Read this as profit-taking on a stock that had already delivered its AI re-rating, not as a signal about networking demand. A 16% post-earnings gain last quarter set a bar that in-line-to-good results could not clear.

⚙️ 2. Cerebras and Coherent: The Same Pattern, Sharper

Cerebras Systems (CBRS) fell 11–12%, having jumped 11.63% during Wednesday’s regular session ahead of results. The AI hardware and supercomputing company — frequently positioned as an Nvidia challenger — missed second-quarter revenue estimates in what were characterised as mixed results, though the company had beaten expectations in its first quarterly report as a public company in June. The stock had recently broken $248 resistance.

Coherent (COHR) fell roughly 5.7–8%. This was the name flagged in the previous edition as the most exposed on the calendar, and the outcome matched the setup precisely:

Consensus was EPS of $1.62 on revenue of $1.98–1.99 billion, with datacom transceiver demand, telecom recovery and margin expansion the variables being priced.

🔧 3. Applied Materials: A $700 Million Raise That Was Not Enough

Applied Materials (AMAT) fell 3.14% after hours to $517.78 on results and guidance that were, on any objective measure, excellent.

The guidance: fourth-quarter revenue of $10.25 billion ± $500 million against a $9.54 billion consensus, and adjusted EPS of $3.82–4.22 versus $3.69 expected. The company raised its Semiconductor Systems revenue expectations for calendar 2026 for the third time this year, said it will grow faster than the market, and guided to another “strong growth year” in 2027 on increased customer visibility. CEO Gary Dickerson has been vocal on DRAM and HBM exposure and expects packaging revenues to grow more than 50% in calendar 2026, with leading-edge foundry logic, DRAM and advanced packaging driving more than 80% of wafer fab equipment growth.

Why it fell:

One structural note: history shows Applied often sells off on earnings day regardless of the result. Morningstar had raised fair value to $520 and flagged global WFE spending above $150 billion in 2026, while the mean analyst target sits near $630 and the median near $590.

💾 4. SanDisk Investor Day: The Memory Supercycle Gets a Model

This was the most consequential scheduled event of the week and it delivered. SanDisk hosted its 2026 Investor Day and laid out a multi-year financial model signalling sustained memory capital spending — directly addressing the question left open when the stock fell 10% on 5–6 August over the composition of its quarter.

The framing that moved the sector: for every two to three million AI accelerators sold, management estimates an incremental one-percentage-point increase in overall NAND bit demand growth. That converts accelerator shipments — a number the market already tracks closely — into a direct NAND demand forecast. Advanced packaging is expected to grow more than 40% in 2026, with 2026 wafer fab equipment spending guided to roughly $135 billion.

The equipment complex responded immediately: Lam Research +4% intraday, Applied Materials +1.5%, and Camtek recovering from a 1%-plus opening decline to roughly flat. KLA has already surged 72% year-to-date as equipment names get re-rated on AI memory demand. Lam’s most recent quarter delivered EPS of $1.82 versus $1.68 expected on revenue of $6.72 billion; its next report is 28 October.

Why this matters beyond one investor day. The bear case on memory since early August has been that SanDisk’s 84.6% gross margin came from pricing rather than volume — roughly $2.01 billion of its sequential growth. A multi-year model tying NAND demand to accelerator units is an argument that the volume follows structurally, which is precisely the evidence that was missing. Whether it holds is a 2027 question, but the sector traded it as settled.

📋 5. The Rest of the Board

📌 Analyst Take

The pattern is now four weeks old and completely reliable, and it deserves to be stated as an operating rule: in this market, the reaction to an earnings report is a function of the prior twelve-month move, not the result.

Company Prior gain Reaction to a beat
AMD +140% YTD −8% on 107% Data Center growth
SanDisk +400% YTD −10% on a 12% EPS beat
Western Digital +220% YTD −10% on a beat-and-raise
Datadog ~doubled −17% on a beat-and-raise
Coherent +105% YTD −6% to −8%
Cisco +16% post-earnings last quarter −8.77%
Applied Materials +190% over 12 months −3.14% on a $700m guidance raise
Versus: Palantir −29% YTD +29%
Versus: CoreWeave 5 straight post-earnings declines +20%

 

The practical implication for the next two weeks is specific. Nvidia reports on 26 August, and Bank of America expects a beat and raise. On this pattern, a beat and raise is not sufficient — the question is whether the result exceeds what a stock that has led the entire market can already absorb. The same applies to Micron, where one analysis noted that if Nvidia or Micron disappoints, the effect ripples across the whole market.

The one genuinely new fundamental input was SanDisk’s model, because it converts a pricing story into a volume story with a stated multiplier. That is the kind of disclosure that changes analyst forecasts rather than sentiment — and it lifted Lam Research 4% on a day when three AI companies beat and fell.

General

Thursday, August 13th, 2026: The Data Says Pause, the Auction Says Otherwise

Two consecutive inflation prints have now come in at or below consensus, money markets price less than a 40% chance of a September hike, and the S&P 500 closed at a record above 7,800 for the first time. On the surface, the disinflation trade has won.

Beneath it, three things say otherwise. The US sold 30-year bonds at the highest rate in a quarter of a century on the same day. The PPI detail contained portfolio management fees up 6.5% in a month and 22.5% on the year — a direct input to core PCE. And Fed watchers still expect at least one hike by year-end despite September being priced out. The market has resolved the near-term policy question and left the medium-term one entirely open.

  1. Why the Auction Matters More Than the Yield

The 10-year fell one basis point to 4.6704% and the 2-year declined. That is the expected response to soft data. The 30-year auction clearing at the highest rate in 25 years is not.

These two facts describe different things. The front end prices the Federal Reserve; the long end prices the government’s cost of borrowing and the market’s inflation expectations over decades. Bloomberg framed the auction explicitly as a measure of the compensation investors demand to finance the deficit.

This is now a three-week pattern, and it is the most important unresolved feature of the market:

Date Front-end / data event Long end
29 July FOMC holds 9–3, three dissents to hike 30Y at a 19-year high
7 Aug Payrolls −23,000; hike odds fall to 42–46% 30Y at 5.192%, near the high
12 Aug CPI in line; core at a six-month low Dollar reversed higher, curve steepened
13 Aug PPI flat; hike odds below 40% 30Y auction at the highest rate in 25 years

 

Every time the policy path has been repriced lower, the long end has refused to follow. That is either a fiscal signal, an inflation-expectations signal, or both — and neither is resolved by two soft monthly prints.

  1. The PPI Detail Undercuts the PPI Headline

Headline PPI was flat against +0.2% expected, with the annual rate down to 4.7% from 5.5%. But the composition tells a more complicated story.

What drove the cooling: declines in energy prices, food prices and energy-sensitive services such as air and truck transportation. In other words, the soft headline is largely an energy story — and energy has already reversed, with Brent up 12% over six sessions before Thursday’s pullback.

What did not cool: core PPI at +0.2% was in line, but Fifth Third’s Bill Adams noted its details have upward implications for July core PCE. Specifically, portfolio management services jumped 6.5% month-on-month and are up 22.5% year-over-year.

Deutsche Bank’s Jim Reid had pre-identified exactly this risk, flagging health care services, airline tickets and investment management fees as the components that flow into PCE rather than CPI. Portfolio management fees rise mechanically with asset prices — which means a market at record highs is itself generating an input into the Fed’s preferred inflation measure. That is a genuine feedback loop, and it is the strongest available argument for the three FOMC dissenters.

Bank of America has separately 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. Thursday’s PPI detail supports that view, not the market’s.

  1. Breadth Is Real, and So Is the Complacency

Two things that appear contradictory are both true, and clients need both.

The breadth is genuine:

The complacency is equally genuine:

The honest synthesis: this is not a narrow, fragile melt-up driven by seven stocks — the participation is the best it has been in this cycle. But it is a market that has not experienced a genuine distribution day in nine months, priced for a Fed that pauses and an AI cycle that compounds. The breadth argues against a crash; the positioning argues against adding.

  1. Oil: The Strategy Changed, Which Changes the Risk Profile

WTI fell 1.39% to $82.11, snapping a five-day advance, with Brent easing from near $88 after a 12% six-session gain.

The most consequential development is strategic, not price-related. The Trump administration is moving toward greater economic pressure on Iran because the military campaign has failed to force capitulation — a pivot from an active military campaign to an economic one, with reliance on the naval blockade rather than airstrikes.

This reshapes the distribution of outcomes in a way the market has not fully absorbed:

For inflation forecasting, this argues for elevated-but-stable energy prices rather than a spike or a collapse — which supports the current disinflation path at the margin, but removes the possibility of the sharp energy-led disinflation that would definitively end the hike debate.

  1. The Earnings Reaction Function Has Fully Inverted

Four AI-linked companies beat expectations on Thursday and all four fell. Cisco −8.77%, Cerebras −11% to −12%, Coherent −6% to −8%, and Applied Materials −3.14% after hours despite guiding fourth-quarter revenue $700 million above consensus and citing “unprecedented demand.”

This is not a signal about AI fundamentals. The same week produced CoreWeave’s $104 billion backlog, Supermicro’s $60 billion order book, Nebius beating on EBITDA, revenue and margins, Lumentum’s revenue doubling, and SanDisk’s multi-year model tying NAND bit demand growth to accelerator unit shipments. The demand evidence is the strongest of the cycle.

It is a signal about price. Applied Materials trades at 32x forward earnings after a 190% twelve-month gain, with free cash flow down 80.21% year-over-year to $210 million. Coherent trades above 42x forward and 7x sales after a 200%-plus surge. When Polymarket prices a 92.5% probability of an earnings beat, the beat contains no information.

The forward implication is uncomfortable and worth stating plainly to clients: Nvidia reports on 26 August into the same dynamic. Bank of America expects a beat and raise. On four weeks of evidence, a beat and raise is the base case, not a catalyst — and Nvidia is the largest position in most portfolios that own any of this.

📊 Global Macro Sentiment Summary — Thursday, August 13th, 2026

Narrative Channel Core Fundamental Trigger Net Portfolio Posture
Index Structure S&P record 7,798.99 (+0.65%), first close above 7,800; Nasdaq +0.81%; Dow +0.13% 🟩 Record on soft data
Breadth Russell 2000 at its 27th record of 2026, +22.6% YTD; equal-weight S&P +15% vs cap-weighted +13.3% 🟩 Genuinely broad
Inflation PPI flat vs +0.2% exp; annual 4.7% from 5.5%; core +0.2% / 4.2% 🟩 Second soft print
Inflation detail Portfolio management services +6.5% MoM, +22.5% YoY — upward implications for core PCE ⚠️ Undercuts the headline
Fed pricing September hike below 40%; Fed watchers still expect at least one hike by year-end 🟨 Near term resolved only
Long end 30-year auction cleared at the highest rate in a quarter of a century 🟥 Curve keeps steepening
Labour Initial claims ticked up; continuing claims fell 🟨 Frozen but not deteriorating
Earnings Cisco −8.77%, Cerebras −11%, Coherent −6–8%, AMAT −3.14% AH — all after beats 🟥 Positioning, not fundamentals
Memory SanDisk model: 2–3m accelerators = +1pt NAND bit demand growth; WFE ~$135bn; packaging +40% 🟩 Pricing story becomes volume story
Energy WTI −1.39% to $82.11, snapping five days; OPEC and IEA cut demand; US inventories +9.1m bbl 🟨 Elevated but stabilising
Volatility VIX at its 2026 low of 14.40; 183 sessions without an 80% down-volume day ⚠️ Untested

 

Upcoming News

Friday, August 14th, 2026 — Theme: “The Consumer Finally Gets Tested” — July retail sales and preliminary University of Michigan sentiment close an inflation-heavy week, arriving after four consecutive months of negative real wages, a payroll contraction and three consumer-facing earnings misses. This is the release most capable of challenging the record highs.

Friday is the week’s last data point and, in the current configuration, the most informative. The equity market’s entire premise is that labour market weakness is constructive because it keeps the Federal Reserve on hold. That premise holds only while the weakness stays confined to the policy channel. Retail sales is the direct test of whether it has reached household spending.

🔴 Calendar — Friday, August 14th, 2026

Times in ICT (Hanoi). ET is ICT minus 11 hours.

Time (ICT) Currency Event / Indicator Consensus Impact
19:30 USD July Retail Sales (MoM) ~+0.2–0.4% (June +0.2%) 🔴 High
19:30 USD July Retail Sales ex-autos — 🔴 High
19:30 USD July Import / Export Prices — 🟠 Med
21:00 USD UMich Consumer Sentiment (August preliminary) prev 55.2 final 🔴 High
21:00 USD UMich 1-year inflation expectations — 🔴 High
21:00 USD Business Inventories (June) — 🟢 Low
15:00 USD Deribit weekly BTC / ETH options expiry (08:00 UTC) — 🟠 Med
During session USD Fed speakers — 🟠 Med

 

  1. Retail Sales — Why This One Matters More Than Usual

June retail sales rose just 0.2%, and much of the spring’s increase came from higher fuel prices that have since partially reversed — meaning the underlying volume picture was weaker than the headline.

The accumulated evidence pointing to consumer strain:

The counterweight is real too. Cava jumped almost 12% on a beat this week, Best Buy was upgraded to Buy at Truist on replacement demand and AI-driven product cycles, and UMich sentiment improved to 55.2 in July from 49.5 in June — a substantial recovery, albeit from a deeply depressed base.

The scenario map:

Outcome Threshold Likely reaction
Weak Below +0.1%, or negative ex-autos Confirms the consumer thread. Equities vulnerable despite the dovish rate path — this is the “weak labour reaches revenues” scenario the market is not positioned for
In line +0.2% to +0.4% Base case. Reinforces the soft-landing framing; record highs likely hold
Strong Above +0.5% Complicates the dovish case — a resilient consumer with core PCE near 3.3% strengthens the hawkish dissenters

 

  1. UMich — Watch the Inflation Expectations Line

July final sentiment came in at 55.2, above the 54.0 consensus and up from 54.4 preliminary and 49.5 in June. Expectations were 55.4 and current conditions 54.8.

The subcomponent that matters most is one-year inflation expectations. With the 30-year Treasury auction clearing at the highest rate in 25 years on Thursday and portfolio management fees up 22.5% year-over-year in the PPI detail, any evidence that household inflation expectations are drifting higher would strengthen the case of the three FOMC dissenters considerably. Fed officials treat anchored expectations as the precondition for tolerating above-target inflation — St. Louis Fed President Musalem warned last week that conditions are “fertile” for them to become unanchored.

  1. Carry-Over From Thursday
  1. The Road to September
Date Event Why it matters
19 Aug July FOMC minutes Detail on the 9–3 vote — the first three-way same-direction dissent since September 2016
25 Aug Consumer Confidence; new home sales Second consumer read
26 Aug Q2 GDP second estimate (advance 1.5%); Nvidia Q2 earnings, 5:00pm ET The largest single-stock event of the quarter, into an inverted reaction function
27–29 Aug Jackson Hole — Warsh’s first address as Chair No established reaction function yet; framework guidance after the Fed dropped forward guidance
28 Aug July core PCE The measure the PPI detail implies will run firm
4 Sept August payrolls Confirmation test for July’s −23,000
15–16 Sept FOMC decision and dot plot September hike now priced below 40%

 

Two of these deserve elevation. July core PCE on 28 August is the release Thursday’s PPI detail pointed at — Bank of America already forecasts +0.24% month-on-month and 3.3% year-over-year, a level it reads as supporting a hike. And Jackson Hole on 27–29 August is Chair Warsh’s first address in the role, with markets still unable to model how this Fed reacts to data.

Compliance note: retail sales consensus varies by provider; cite a range around +0.2% to +0.4% rather than a point estimate, and note that June’s 0.2% was flattered by fuel prices that have partially reversed. UMich preliminary readings are frequently revised. And continue to describe the Strait of Hormuz as contested — the administration disputes private shipping data showing low traffic, and talks are deadlocked.

Snapshot

Thursday, August 13th, 2026 — Theme: “Record Above 7,800, and Nobody Got Paid for Beating” — Flat PPI drove the S&P to its first close above 7,800 and the Russell to its 27th record of the year. Cisco, Cerebras and Coherent all beat and fell 6–12%. Applied Materials then raised guidance by $700 million after the close and dropped 3%.

Thursday completed a two-day inflation window that has effectively removed a September rate hike from market pricing — money markets now put the odds below 40% — and delivered a record close for the S&P 500 at 7,798.99. But the session’s two most informative facts pointed the other way: the US sold 30-year bonds at the highest rate in a quarter of a century, and four AI companies that beat expectations all traded lower. The disinflation is in the monthly data; it is not in the long end of the curve, and the earnings bar is now higher than any beat can clear.

🏛️ The Bottom Line

The S&P 500 rose 0.65% to a record 7,798.99, clearing 7,800 intraday for the first time. The Nasdaq Composite advanced 0.81% to 26,803.03 and the Dow added 69.72 points (+0.13%) to 53,839.99. The Russell 2000 opened at an all-time high of 3,045.48 following its 27th record close of 2026, and is up 22.6% year-to-date against 13.2% for the S&P. The S&P 500 Equal Weight Index is up roughly 15% versus 13.3% for the cap-weighted index.

July PPI was flat month-on-month against a +0.2% consensus, with the annual rate falling to 4.7% from 5.5%. Core PPI rose 0.2%, matching forecasts, at 4.2% year-over-year. Fifth Third’s Bill Adams noted the headline was cooler than expected on declines in energy, food and energy-sensitive services such as air and truck transportation — but that core PPI details have upward implications for July core PCE, with portfolio management services jumping 6.5% on the month and up 22.5% on the year. Initial jobless claims ticked up week-over-week while continuing claims fell.

The 10-year Treasury yield eased one basis point to 4.6704% and money markets priced a September hike below 40% — but the US sold 30-year bonds at the highest rate in a quarter of a century. Fed watchers still expect at least one hike by year-end. Cleveland’s Hammack spoke at 8:15am ET and Richmond’s Barkin at 8:40am ET.

Four AI companies beat and were sold. Cisco fell 8.77% — the Dow’s worst performer — after results that surpassed expectations and highlighted robust AI infrastructure demand; it had gained 16.36% after its previous report. Cerebras dropped 11–12% on mixed results that missed revenue estimates, having jumped 11.63% the prior session. Coherent fell roughly 6–8%, having entered up 105% in 2026 with a 15% implied move and 77% bullish / 0% bearish analyst positioning. After the close, Applied Materials fell 3.14% to $517.78 despite guiding Q4 revenue to $10.25 billion ± $500 million versus $9.54 billion expected and adjusted EPS of $3.82–4.22 versus $3.69, citing “unprecedented demand” and another “strong growth year” in 2027.

SanDisk’s Investor Day was the week’s most consequential scheduled event. The company laid out a multi-year financial model signalling sustained memory capital spending, estimating that every two to three million AI accelerators sold adds roughly one percentage point to overall NAND bit demand growth, with advanced packaging growing more than 40% in 2026 and 2026 wafer fab equipment spending near $135 billion. Lam Research rose about 4% intraday and Applied Materials 1.5%; KLA is up 72% year-to-date on the equipment re-rating.

WTI fell 1.39% to $82.11, snapping a five-session advance, with Brent easing from near $88 after a 12% six-session gain. OPEC again cut its 2026 demand growth forecast and the IEA flagged demand headwinds; US crude inventories rose 9.1 million barrels, the biggest build since February. Trump said the US has “total control over the Strait of Hormuz” and “we own it,” while the administration pivots toward economic pressure as the military campaign has failed to force capitulation. Gold pulled back to $4,363–4,390 after rejection at its 200-day moving average.

The Financial Times reported Anthropic could go public as soon as October at a record $2 trillion valuation.

📉 Reference Levels for the Friday Open (August 14th)

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 7,757 (prior record) → 7,700 Record — no overhead 🟩 Blue sky, VIX at 2026 low
Nasdaq Composite 26,588 → 26,445 26,803 → record zone 🟩 Nearing its record
Dow Jones 53,770 → 53,178 54,349 → 54,744 (records) 🟨 Cisco drag
Russell 2000 3,036 → 3,027 3,045 → record zone 🟩 27th record of 2026
US 10Y Yield 4.60% → 4.55% 4.70% → 4.73% 🟨 Front end rallying
US 30Y Yield 5.10% 25-year auction high 🟥 Curve steepening
WTI Crude $80 → $78 $84.67 🟨 Five-day run broken
Brent Crude $83.55 → $80 $88 → $90.12 🟨 Demand downgrades
Gold (spot) $4,300 → $4,223 $4,450 (200-day MA) 🟨 Rejected at the average
VIX — 16 → 18 ⚠️ 14.40 is the 2026 low

 

📊 Market Sentiment & Bias

Inflation: 🟩 Two soft prints, one awkward detail. PPI flat with annual producer inflation down to 4.7% is unambiguously good. But the cooling was concentrated in energy and energy-sensitive services, and portfolio management fees up 22.5% year-over-year feed directly into core PCE — the measure Bank of America already expects at 3.3%.

Rates: 🟥 The long end still dissents. The front end rallied and September is priced below 40%, yet the 30-year auction cleared at the highest rate in 25 years. Three weeks running, lower policy expectations have not reached the long end.

Breadth: 🟩 The best of this cycle. Russell 2000 at its 27th record and up 22.6%; equal-weight S&P outperforming cap-weighted; two-thirds of index members beating the index.

Positioning: ⚠️ Untested. VIX at its 2026 low of 14.40 and 183 consecutive sessions without an 80%-plus downside-volume day on the NYSE — a record streak.

Earnings: 🟥 The reaction function is inverted. Four beats, four declines, including a $700 million guidance raise. Nvidia reports 26 August into this.

Memory: 🟩 The pricing story became a volume story. SanDisk’s accelerator-to-NAND multiplier is the first disclosure that changes forecasts rather than sentiment.

💡 Top Trade Takeaway: “Own the Breadth, Not the Leaders”

Focus: Favour small and mid caps and equal-weight exposure, where the leadership actually is. Retain memory and semiconductor equipment where SanDisk’s model has changed the forecast basis. Avoid adding to the year’s largest gainers ahead of Nvidia on 26 August. Keep gross exposure moderate with the VIX at its annual low.

Logic. The most useful thing about Thursday is the gap between where the returns are and where the attention is. The Russell 2000 is up 22.6% at its 27th record close of the year, and the equal-weight S&P is beating the cap-weighted index by nearly two points — meanwhile the megacap AI complex delivered four earnings beats and four declines. The market is broadening precisely as the leaders stop being paid for good news.

The mechanism behind those declines is valuation, not fundamentals, and the distinction matters for how you act on it. The same week produced CoreWeave’s $104 billion backlog, Supermicro’s $60 billion order book, Nebius beating on every line, Lumentum’s revenue doubling and SanDisk’s multi-year NAND model. Applied Materials fell 3% while raising guidance $700 million because it trades at 32x forward after a 190% twelve-month gain with free cash flow down 80.21% to $210 million. That is a price problem in a business with an improving outlook.

The unresolved macro question is the long end, and it has now dissented three weeks running. Two soft inflation prints, a payroll contraction and September priced below 40% — and the 30-year still cleared at the highest auction rate in a quarter of a century. Combined with portfolio management fees up 22.5% year-over-year feeding core PCE on 28 August, the case that inflation is beaten rests entirely on monthly data that both the auction market and the Fed’s three dissenters are declining to accept.

The near-term risk is the consumer. Real wages are negative 0.2% year-over-year, inflation has exceeded wage growth for four consecutive months, July payroll losses concentrated in retail and leisure, and three consumer-facing companies have missed in six sessions. Friday’s retail sales is the direct test of whether the “weak labour is good news” framing survives contact with revenues.

Calendar discipline: July retail sales and preliminary UMich Friday 14 August; FOMC minutes 19 August; Q2 GDP second estimate and Nvidia earnings 26 August; Jackson Hole 27–29 August, Warsh’s first address as Chair; July core PCE 28 August; August payrolls 4 September; FOMC 15–16 September.

The reports belong to The Concept Trading and Van Hung Nguyen.

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