Markets raced higher last week as investors were encouraged by an outstanding corporate earnings season, falling oil prices, and a jobs report that reduced concerns about a Federal Reserve rate increase. Technology led the way, but the rally was broad, with stocks, bonds, gold, and silver all participating.
There is plenty to feel good about. Corporate profits have been exceptional. At the same time, investors should remember that expectations are now very high, inflation remains an issue, and the labor market is clearly slowing.
That combination should make the next several months interesting.
Key Takeaways
- Stocks posted one of their strongest weeks in months, with the NASDAQ gaining more than 5%.
- Nearly 90% of S&P 500 companies have reported second-quarter results, and earnings growth has been exceptional.
- July payrolls declined by 23,000 jobs, although private employers actually added 30,000 workers.
- Treasury yields and oil prices moved lower, relieving some pressure on stocks and bonds.
- This week’s CPI, PPI, and Retail Sales reports should provide an important update on inflation and the health of the consumer.
- August is National Make-A-Will Month, a good reminder to review your estate plan and beneficiary designations.
Market Overview
What a difference a week makes.
After investors spent much of late July worrying about rising bond yields, Artificial Intelligence spending, and the Federal Reserve, stocks came roaring back last week.
The S&P 500 gained 3.52%, while the technology-heavy NASDAQ jumped 5.07%. Small-cap stocks also participated, with the Russell 2000 gaining 3.56%. International markets moved higher as well.
Bonds also benefited as Treasury yields declined, while gold and silver finally joined the party.
Market Index Performance: Last Week & Year-to-Date
| INDEX | LAST WEEK | YTD |
|---|---|---|
| Dow Jones Industrial Average | +2.99% | +12.46% |
| S&P 500 | +3.52% | +13.27% |
| NASDAQ Composite | +5.07% | +14.71% |
| Russell 2000 | +3.56% | +22.31% |
| Foreign Stocks | +2.78% | +13.00% |
| Emerging Markets | +2.34% | +19.89%% |
| Bloomberg U.S. Aggregate Bond | +0.41% | (0.28%) |
| Bloomberg Municipal Bond | +0.49% | +0.91% |
| 10-YEAR U.S. TREASURY 4.65% retreated slightly | WTI CRUDE OIL $78.18/barrel retreated sharply |
The 10-Year U.S. Treasury yield ended the week around 4.65%, down from approximately 4.74% the previous week.
WTI crude oil retreated sharply, finishing around $78 per barrel. Oil declined approximately 8.7% for the week as investors became somewhat more optimistic about the possibility of reduced tensions surrounding Iran and shipping through the Strait of Hormuz.
Gold increased 7.46% for the week, while silver jumped 10.44%.
Quite a week.
Corporate Earnings Have Been Remarkable
With nearly 90% of S&P 500 companies having reported second-quarter results, the numbers have been impressive.
According to FactSet, 88% of S&P 500 companies have reported, and the blended year-over-year earnings growth rate has reached an incredible 50%. Revenue growth is running at approximately 15%. Equally impressive, 86% of the companies that have reported earnings exceeded analyst’s estimates.
There is an important piece of context behind that 50% earnings number.
Unusually large gains reported by Alphabet and Amazon helped boost the headline figure. If those two companies were excluded, FactSet estimates S&P 500 earnings growth would be closer to 32%.
Still extremely strong, but certainly different from 50%.
Artificial Intelligence remains a major contributor to business investment and earnings growth, while higher-income consumers have continued to spend at a relatively healthy pace.
For now, Corporate America continues delivering.
The bigger question, what happens next?
What About Corporate Earnings in 2027?
Expectations for profit growth during the remainder of 2026 remain high. FactSet currently estimates S&P 500 earnings growth of approximately 27% for the third quarter and 25% for the fourth quarter.
Remember, however, that corporate earnings are typically compared with the same quarter from one year earlier.
Fast-forward to 2027.
Companies will then be comparing their results against what has been an extraordinary 2026. Those comparisons naturally become more difficult.
Stocks don’t necessarily require earnings growth to accelerate every year. Markets are forward-looking, and valuations, interest rates, economic growth, and investor expectations all play a role.
But ultimately, profits matter.
If earnings continue growing at a healthy pace, that provides fundamental support for stock prices. If growth slows more sharply than investors expect, today’s higher valuations could become more difficult to justify.
I suspect we will be having plenty of discussions about this in 2027, especially once the mid-term elections are behind us.
The Jobs Report Changed the Interest Rate Conversation
Last Friday’s employment report provided the week’s biggest economic surprise.
The U.S. economy lost 23,000 nonfarm payroll jobs during July, while the unemployment rate edged down to 4.1%.
At first glance, losing jobs doesn’t sound particularly encouraging.
Dig a little deeper, however, and the report becomes more complicated.
Private employers actually added 30,000 jobs. Government employment declined by 53,000, with nearly 50,000 of those losses coming from local government education. Retail employment also declined.
Another item worth noting: employment gains for May and June were revised lower by a combined 103,000 jobs.
So, while I would not characterize the labor market as falling apart, there is little question that hiring has slowed.
Financial markets responded almost immediately. Treasury yields declined, and expectations for a Federal Reserve rate increase at its next meeting decreased. LPL described the labor market as experiencing an “orderly slowdown,” with relatively limited signs of broader stress so far.
The Federal Reserve’s next scheduled meeting takes place September 15–16.
Between now and then, the Fed will have plenty more economic data to digest.
Inflation Moves Back to Center Stage
With most second-quarter earnings reports now behind us, attention should increasingly shift toward economic data.
Wednesday- Consumer Price Index
The Consumer Price Index (CPI) will give us the latest reading on what consumers are paying for goods and services.
Economists generally expect the annual inflation rate to moderate slightly, although prices may still show a modest monthly increase after June’s decline.
Thursday- Producer Price Index
The Producer Price Index (PPI) measures inflation further up the supply chain and can offer clues about future consumer prices.
The July report is scheduled for Thursday morning.
Friday: Retail Sales Report
Finally, Friday brings the latest Retail Sales Report.
Consumer spending remains one of the most important pillars of the economy. Overall spending has held up relatively well, but the story isn’t the same for every household.
Higher-income consumers continue to benefit from generally stronger balance sheets and wealth gains, while lower- and middle-income households are feeling more pressure from higher living costs and borrowing rates.
A strong economy needs consumers to keep spending, but there is only so much inflation households can absorb indefinitely.
The Iran Wildcard Hasn’t Disappeared
We also cannot forget the continuing uncertainty surrounding Iran and the Middle East.
Optimism about potential diplomatic progress surrounding shipping through the Strait of Hormuz contributed to last week’s decline in oil prices. At the same time, additional reports of Iranian military activity late in the week provided another reminder that the situation can change quickly.
For now, financial markets appear to believe the conflict will remain relatively contained.
Will they be right?
Definitely beyond my pay grade.
I have learned over the years that predicting geopolitical events is nearly impossible. What we can do is watch their impact on oil, inflation, interest rates, corporate profits, and ultimately the financial markets.
August is National Make-A-Will Month
Before wrapping up this week’s report, I want to mention something that has nothing to do with whether the S&P 500 goes up or down tomorrow.
August is National Make-A-Will Month.
I know estate planning is not the most exciting summer topic, but it is an important one.
If you already have an estate plan, when was the last time you actually looked at it?
Families change. Assets change. Tax laws change. Children get older. Grandchildren arrive. People named as executors or trustees may no longer be the people you would choose today.
And remember, a will is only one piece of an estate plan. Your retirement accounts, life insurance policies, and certain other assets generally pass according to their beneficiary designations, making it important that those designations remain coordinated with your overall wishes.
National Make-A-Will Month is a good excuse to pull those documents out, make sure they still reflect what you want, and speak with your estate-planning attorney if changes are necessary.
Not nearly as exciting as watching the NASDAQ jump 5% in a week, but considerably more important to your family.
If this has you wondering whether your own estate plan needs attention, we invite you to read our new Make-A-Will Month article. It takes a closer look at how a will, power of attorney, and advance healthcare directive can work together to make your wishes clear and provide valuable guidance for the people you care about.
Final Thoughts
Strong corporate profits continue to provide an impressive foundation for the stock market.
The 50% headline earnings-growth number deserves some perspective, but even after adjusting for a few unusual items, Corporate America is performing very well.
Now the focus begins shifting.
Inflation, employment, consumer spending, interest rates, and geopolitics will probably play a larger role as earnings season winds down.
I continue to believe investors should expect volatility in both directions. Markets have already given us several reminders this summer of how quickly sentiment can change.
Stay diversified. Stay disciplined. Keep enough money available for your near-term retirement needs. And don’t allow one week’s headlines, whether good or bad, to derail a long-term plan.
As always, thank you for taking a few minutes each week to read our Retirement Report. Please feel free to share it with family, friends, or colleagues who may find it helpful.
Until next week, stay informed and enjoy the journey to and during retirement.
Thank you for reading!
Paul Levin, CFP®, ChFC®, RICP®1, TPCP®
Managing Principal
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All market data sourced from The Wall Street Journal, Aug 7, 2026.
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
- RICP® conferred by The American College. ↩︎
