August 2026 Market Snapshot

Equity investors have largely looked past geopolitical tensions and the release of “economic D-day” in recent weeks, however the opening of the Strait of Hormuz would likely buoy markets while drastically increased hostilities could spook markets. Fed Chair Kevin Warsh noted in his recent Jackson Hole Symposium speech that inflation concerns are likely to remain “higher for longer.” This outlook pushed short-term treasury yields higher. The Treasury Department also announced they will begin buying back 10- and 30-year notes to support treasury market liquidity on September 9th, which softened long-term yields. With a flattened yield curve, this adds another complication to the Fed’s near-term policy route. Odds of an interest rate hike in September have accordingly increased from 36% to 67%. In positive news, economic resiliency continues as Q3 GDP is tracking at 4.61% – double the original 2.4% Bloomberg consensus. Furthermore, the Composite Purchase Managers’ Index (PMI) is sitting at a 52-month high, indicating continued business expansion at a pace well above historical averages. Markets have been driven higher by these robust economic fundamentals, but investors will continue to digest ongoing news as we enter September – a historically poor month for the stock market.