Week in Review: August 14, 2026

Markets ended a relatively quiet week modestly higher, with the S&P 500 notching a new record along the way. For much of the week, markets appeared listless, searching for direction and finding little. Perhaps it was the thin trading volumes common this time of year, the lack of meaningful developments in the Middle East, or the fact that earnings season has largely run its course. Even the much-anticipated July inflation data engendered little reaction.

Like equity markets, yields struggled for direction as well, with the 10-Year Treasury closing at 4.70%, up from 4.65% the prior week. Despite the modest increase at the long end of the curve, short-term rates fell slightly, reflecting decreased expectations for a September rate hike. July inflation data coupled with the prior week’s employment report hinted at cooling economic conditions, helping lower the market odds of a September rate hike from 44% to 33%.

There were few developments in the Middle East where the US and Iran remain locked in an economic war of attrition and words, that shows few signs of ending soon. The US demonstrated its commitment to its naval blockade of Iranian ports by firing upon a ship attempting to leave Iran. Both sides said the other must pay reparations for damages as part of any lasting peace. Traffic through the Strait remained highly constricted with an average of ~8 ships/day transiting during the week, down from the daily average of ~130-140 prior to the outbreak of fighting in March. Until the Strait is reopened, energy prices are likely to remain elevated.