Market Perspective for August 2, 2026

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This was another consequential week for market participants as several important events took place. The major news this week revolved around the Fed’s July rate decision as well as advance GDP data and the release of the Core PCE Price Index. There was also drama regarding the Bank of Japan (BOJ) and its alleged intervention in the price of the Yen late in the week. The United States Treasury warned that it could take action to intervene and stabilize the price of the Yen compared to the dollar.

On Wednesday afternoon, the Fed decided to keep interest rates where they are until at least September. However, three voting members disagreed with that decision saying that rates should be increased. Of course, as monetary policy is often data dependent, those who decided to hold steady were likely vindicated.

This is because on Thursday, the advance GDP data showed that the economy only grew 1.5 percent compared to an expected 2.1 percent in the second quarter. Furthermore, the Core PCE Price Index grew 0.1 percent compared to an expected increase of 0.2 percent.

Unemployment claims data for the last week was also made public on Thursday. Over the past seven days, there were 197,000 claims for benefits compared to an expected 201,000 claims. Last week, 188,000 claims were made.

On Friday, the University of Michigan released its inflation expectation and consumer sentiment reports. Inflation is expected to be at 4.2 percent in 12 months while consumer sentiment came in at 55.2 compared to an expected 53.9.

The S&P 500 gained 0.46 percent this week to finish at 7,489. This was an increase of 34.51 points over the past five trading days, and the index has gained roughly 1.3 percent over the past 30 days. For the week, it made a low of 7,320 on Wednesday and closed near its weekly high on Friday.

The Dow was almost flat this week closing up 0.02 percent to finish at 52,485. This was a gain of about 10 points for the index that has gained about .6 percent over the past month. Over the last five trading days, the index made a high of 52,386 on Tuesday and a low of 51,633 on Thursday.

Finally, the Nasdaq was up 0.70 percent this week to close at 25,373. This was a gain of 183 points for the index that has underperformed the other two major American exchanges. Over the past month, it has lost about 0.66 percent. This week, the index made a low of 24,456 on Wednesday and closed near its weekly high on Friday.

Intervention in the yen likely occurred on Thursday as the currency dropped to a spot price of 158 against the dollar. More large moves took place on Friday but within a smaller trading range. On Friday morning, the BOJ announced it would keep its key interest rate at 1 percent.

The ADP and BLS versions of their job reports come out on Wednesday and Friday. The ISM Services and Manufacturing reports also come out next week in addition to the JOLTS jobs report.

Market Perspective for July 26, 2026

Market Perspective for July 26, 2026

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For the most part, market volatility was caused by escalating strikes against Iran. This has a significant impact on oil prices and equities prices. Over the last week, West Texas Intermediate (WTI) went from about $85 a barrel to about $95 a barrel. Since the start of July, the price of WTI reached a low of $75 after the memorandum of understanding was public. However, there is a chance that WTI could get pack to $100 or more per barrel if the conflict were to ramp up further.

On Thursday, the most important scheduled news release took place on Thursday when unemployment claims for the last seven days were made public. It was revealed that 187,000 claims for benefits were made over that period. This was significantly lower than the 211,000 claims expected by analysts and the 209,000 requests for benefits from the previous week.

This suggests that the economy is still strong regardless of inflation and other pressures on consumers. It may also suggest that monetary policy can remain unchanged for the time being. It is expected that the Fed will cut interest rates where they are within a range between 3.75 percent and 4 percent.

The S&P 500 was down about 99 points last week to finish at 7,411. This was a loss of 1.32 percent over the last five trading days. The index is now down 1.15 over the past month. On Wednesday, the market made its high of the week when it hit 7,524 while it made its low of the week on Thursday when it dipped to 7,383.

The Dow was down 0.8 percent this past week to close at 51,946. This was a loss of 416 points over the last five trading days. The index is up 0.28 percent over the past month. On Wednesday, the index made a high of 52,392 while it made its low of the week on Thursday of 51,561.

Finally, the Nasdaq was down 2.86 percent to close at 24,975. This was a loss of 735 points over the past week. It made a weekly high of 26,345 at the opening of trading on Monday and closed near its low of the week.

In international news, Canada announced on Monday that its inflation was down 0.4 percent over the last month. The same day, New Zealand announced that inflation was up 1.5 percent over the last quarter. On Wednesday, Great Britain announced that its annual inflation rate was 2.6 percent, which was slightly lower than expected.

Australia announced on Wednesday night that its economy added 76,000 jobs in June and that its unemployment rate was at 4.4 percent. Finally, on Thursday, the European Union announced that its key interest rate would remain unchanged at 2.4 percent.

The upcoming week will see the Fed will make its July interest rate decision on Wednesday. Japan and Great Britain will also make interest rate decisions next week. The Core PCE Price Index for June as well as advance GDP data for the second quarter of 2026 will be released on Thursday.