Weekly Wrap

The stock market finished a relatively eventful week with only modest changes at the index level, as favorable inflation data and resilient participation helped offset pressure from rising oil prices and weakness across several mega-cap names. The S&P 500 gained 0.4% and reached fresh record highs during the week, while the Nasdaq Composite added 0.1% and the DJIA slipped 0.6%. Beneath the surface, the Russell 2000 and S&P Mid Cap 400 both gained 1.1%, outperforming the major averages.

Technology had a mixed showing. The information technology sector edged 0.2% higher, while the PHLX Semiconductor Index gained just 0.5% after a choppy week that featured several sharp intraday swings. Software fared somewhat better, with the iShares Expanded Tech-Software ETF gaining 1.4%. Meanwhile, the broader mega-cap complex was subdued, with the Vanguard Mega Cap Growth ETF slipping 0.1%.

That relative weakness across the market's largest growth names weighed on communication services (-1.0%) and consumer discretionary (-2.0%), which were the week's weakest-performing sectors. Even so, the broader market held up well, with the Russell 2000 and S&P Mid Cap 400 each advancing 1.1% and reaching record highs during Friday's session.

Inflation data provided an important source of support as the week progressed. July CPI matched expectations, with headline prices increasing 0.1% and core prices rising 0.2%, while Thursday's PPI report came in slightly softer than expected. Together, the reports eased concerns that the Federal Reserve will need to raise rates yet in September, helping support growth and other rate-sensitive stocks through the middle of the week. Friday's weaker-than-expected retail sales report added another indication of softer economic activity, though a rise in longer-term Treasury yields limited the market's response.

Oil prices remained a significant counterweight throughout the week. WTI crude climbed roughly 5.5% amid continued uncertainty surrounding the U.S.-Iran conflict and the Strait of Hormuz, despite a sharp retreat on Thursday. The energy sector surged 7.3%, easily the week's best-performing S&P 500 sector. The utilities (+1.5%), consumer staples (+1.0%), health care (+1.0%), and financials (+0.9%) sectors also finished higher.

Treasury yields ultimately sent a mixed signal. The 2-year note yield declined four basis points for the week to 4.17%, consistent with reduced expectations for near-term Fed tightening, while the 10-year note yield rose four basis points to 4.70%.

Overall, the week's modest index-level changes masked considerably more movement beneath the surface. Better-than-feared inflation readings helped the S&P 500 establish fresh record highs, while strength in small- and mid-cap stocks pointed to broader participation beyond mega-cap growth. At the same time, higher oil prices, mixed technology performance, and elevated longer-term Treasury yields prevented those favorable developments from translating into a more substantial weekly advance.

• Russell 2000: +1.1% week-to-date
• S&P Mid Cap 400: +1.1% week-to-date
• S&P 500: +0.4% week-to-date
• Nasdaq Composite: +0.1% week-to-date
• DJIA: -0.6% week-to-date

Monday:

Stocks started the week on a muted note, with the S&P 500 (-0.1%), Nasdaq Composite (-0.3%), and DJIA (-0.1%) finishing modestly lower amid a surge in oil prices and a late retreat across select tech names.

Rising oil prices weighed on the market at the open and continued to climb throughout the day, with crude oil futures settling today's session $3.98 higher (+5.1%) at $82.17 per barrel. President Trump said that the U.S. will give Iran time to face mounting economic pressure amid the inability to reach a lasting deal, while Iran reiterated that reopening the Strait of Hormuz is contingent on the U.S. permanently ending the conflict and paying reparations.

The spike in oil prices sent Treasury yields higher across the curve, weighing on oil- and rate-sensitive areas of the market. The real estate (-1.2%) and utilities (-1.1%) sectors were the worst-performing S&P 500 groups, while the iShares U.S. Home Construction ETF fell 2.7% and the Russell 2000 (-0.6%) underperformed the major averages.

However, the broader market weathered the oil-driven pressure relatively well, with mixed sector strength keeping losses muted at the index level. Outside of the energy sector (+4.6%), the health care sector (+1.5%) outperformed, with Vertex Pharma (VRTX 523.91, +27.84, +5.61%) surging after competitor Sionna Therapeutics (SION 4.50, -46.54, -91.18%) halted development of a cystic fibrosis treatment following disappointing Phase 2a results.

The materials sector (+0.7%) also posted a decent gain as precious metals prices continued to move higher, while positive showings from Alphabet (GOOG 355.84, +2.37, +0.67%) and Meta Platforms (META 594.92, +2.82, +0.48%) helped outweigh lingering post-earnings weakness in The Trade Desk (TTD 13.39, -0.41, -2.97%) within the communication services sector (+0.7%).

Meanwhile, the information technology sector (-1.1%) faced pressure as semiconductor stocks weakened throughout the session. The PHLX Semiconductor Index fell 2.9%, closing at a session low as some profit-taking followed last week's strong rebound. NVIDIA (NVDA 217.56, -6.40, -2.86%) contributed to the late weakness, sliding to session lows after the Financial Times reported that the company is working with a host of large asset managers on financing platforms aimed at mobilizing more than $500 billion for AI infrastructure development.

Intel (INTC 97.52, -4.13, -4.06%) also weighed on the chipmaker index after announcing a $15 billion underwritten common stock offering, while Apple (AAPL 308.26, -5.07, -1.62%) lagged after Jefferies downgraded the stock to Underperform from Hold.

Software stocks provided a notable counterweight to the weakness in semiconductors. The iShares GS Software ETF (IGV) climbed 2.3%, helping limit the information technology sector's decline despite the late selling across chipmakers.

Even with late weakness in technology and a sharp rise in oil prices, the major averages finished only modestly lower, remaining near last week's record highs and reflecting some underlying strength following a strong Q2 earnings season.

With earnings beginning to wind down, the market's next test of sentiment looms with Wednesday's release of the July Consumer Price Index (Briefing.com consensus 0.1%), which will likely be influential in the Fed's next policy decision. The CME FedWatch tool now assigns a 51.7% probability of a rate hike at the September FOMC meeting, up from 44.4% on Friday but down from 67.2% a week ago.

U.S. Treasuries retreated to begin the week, lifting yields on the 5-year note and longer tenors to one-week highs while the 2-year note reversed its decrease from Friday, staying just above its 50-day moving average (4.186%). The 2-year note yield settled up three basis points to 4.24%, and the 10-year note yield settled up four basis points to 4.70%. 

There was no economic data of note. 

Tuesday:

The S&P 500 (-0.3%), Nasdaq Composite (-0.6%), and DJIA (-0.3%) finished lower today as the major averages steadily faded from another quiet start amid rising oil prices and weakness across most mega-cap technology stocks.

A relatively light corporate news flow and some caution ahead of tomorrow's July Consumer Price Index (Briefing.com consensus 0.1%) kept the major averages near their flatlines through the first two hours of trading. Crude oil initially retreated from its overnight highs after Bloomberg reported that Pakistan's Defense Minister Khawaja Asif said the U.S. and Iran were close to "some sort of an arrangement." The tone shifted later in the morning, however, as reports reiterated that Iran's demands must be met before it will agree to reopen the Strait of Hormuz.

Stocks began to move lower as oil prices climbed, with WTI crude oil futures ultimately settling $1.00 higher (+1.2%) at $83.17 per barrel. The energy sector (+1.1%) was one of the best-performing S&P 500 sectors as a result.

While there were pockets of weakness throughout the broader market, losses were more pronounced across mega-cap technology names, with the Vanguard Mega Cap Growth ETF retreating 0.7%. The communication services sector (-2.1%) finished as the worst-performing S&P 500 sector as Alphabet (GOOG 343.00, -12.84, -3.61%) was a particular laggard, while weakness in Amazon (AMZN 272.27, -5.82, -2.09%) weighed on the consumer discretionary sector (-0.8%).

Within the information technology sector (-0.3%), software names such as Oracle (ORCL 145.44, -5.60, -3.71%) and AppLovin (APP 318.68, -20.32, -5.99%) added pressure following yesterday's rally.

Semiconductor stocks were a relative bright spot, though the PHLX Semiconductor Index (+0.9%) finished well off its earlier highs. NVIDIA (NVDA 217.48, -0.07, -0.03%) gave back the entirety of a strong opening gain that followed yesterday's late selloff on news of its initiative with several major asset managers to mobilize up to $500 billion for AI compute infrastructure. KKR (KKR 111.02, +7.18, +6.92%) and Apollo Global Management (APO 140.24, +8.22, +6.23%) both participants in the initiative, were among the day's best-performing S&P 500 components.

Elsewhere, the industrials sector (+0.6%) followed the semiconductor group higher, with the usual collection of electrical equipment names outperforming, while Axon (AXON 636.31, +39.98, +6.70%) was an S&P 500 standout as it recovered some of its sharp post-earnings slide from last week.

The defensive utilities sector (+1.1%) tied the energy sector for the day's top performance amid the weakness in mega-cap technology stocks.

While eight S&P 500 sectors finished lower, the market displayed some resilience beneath the surface. The S&P 500 Equal Weight Index (+0.3%) finished higher, and advancers still outpaced decliners on both the NYSE and Nasdaq. Additionally, the Russell 2000 (+0.3%) and S&P MidCap 400 (+0.3%) outperformed the major averages.

Still, below-average trading volume and the pullback across mega-cap stocks pointed to some caution ahead of tomorrow's July CPI release (Briefing.com consensus 0.1%). The inflation reading could play a decisive role in shaping the Fed's next policy move, as the CME FedWatch tool currently assigns equal odds to a rate hike or a hold at the September FOMC meeting.

U.S. Treasuries recorded modest gains on Tuesday, inching higher ahead of the highly anticipated Wednesday morning release of July CPI. The U.S. Treasury started this week's note and bond auction slate with a strong $58 billion 3-year note offering, though Treasuries held at their pre-auction levels into the close. The 2-year note yield settled down two basis points to 4.22%, and the 10-year note yield settle down two basis points to 4.68%. 

Reviewing today's data:

• July NFIB Small Business Optimism 99.8 (Briefing.com consensus 97.1); Prior 97.4
• July Existing Home Sales 4.06 mln (Briefing.com consensus 4.07 mln); Prior was revised to 4.13 mln from 4.09 mln
  • The key takeaway from the report is that mortgage rates above 6.00%, limited inventory, and elevated prices continue to work against stronger existing home sales activity.

Wednesday:

Stocks finished mostly higher on Wednesday, with the S&P 500 (+0.3%) and Nasdaq Composite (+0.5%) posting modest gains while the DJIA ended flat. Trading remained confined to relatively narrow ranges throughout the session as an in-line inflation report cleared the week's biggest macro hurdle without producing a major directional move.

The July Consumer Price Index matched expectations, with headline CPI increasing 0.1% and core CPI rising 0.2%. The lack of an upside surprise helped temper concerns about additional Fed tightening, with the CME FedWatch tool assigning a 60.1% probability to the FOMC leaving rates unchanged in September, up from 51.6% yesterday.

With the highly anticipated report offering little reason to alter the broader market outlook, attention quickly shifted back toward individual stocks and sectors. That was particularly evident in the information technology sector (+1.1%), which led the market as enthusiasm returned to semiconductor and AI-related names. The PHLX Semiconductor Index jumped 2.5%, with strong post-earnings reactions in CoreWeave (CRWV 107.73, +17.41, +19.28%), Super Micro Computer (SMCI 37.55, +5.95, +18.83%), and Lumentum (LITE 932.47, +111.88, +13.63%) reinforcing enthusiasm surrounding continued AI infrastructure spending.

Outside the information technology sector, SpaceX (SPCX 146.22, +12.93, +9.70%) was another momentum standout, surging after introducing Grok 4.6.

The real estate sector (+1.1%) matched information technology for the day's best performance amid some modest easing in Treasury yields.

Participation elsewhere was more mixed, however, with strength in semiconductor and AI-related names contrasting with weakness across several non-semiconductor mega-cap stocks. The consumer discretionary sector (-1.4%) finished at the bottom of the sector standings as Amazon (AMZN 267.28, -4.99, -1.83%) and Tesla (TSLA 327.51, -5.30, -1.59%) moved lower. Large apparel names also faced pressure, while homebuilders and related construction names struggled even as yields eased. The iShares U.S. Home Construction ETF fell 2.3%.

The communication services sector (-0.9%) was another laggard, with Meta Platforms (META 578.85, -20.27, -3.38%) among the weakest "Magnificent Seven" components. Charter Comm (CHTR 150.22, -7.47, -4.74%) also finished sharply lower despite little in the way of company-specific news.

Unlike the previous two sessions, geopolitical developments and oil prices had little influence on today's action. There were few meaningful developments surrounding the U.S.-Iran conflict, and WTI crude oil futures settled just $0.09 higher (+0.1%) at $83.26 per barrel. The energy sector (+0.2%) finished with a modest gain.

Overall, today's relatively uneventful session reflected a market that received some reassurance from the inflation data without a significant shift in the broader outlook. Reduced expectations for a September rate hike and renewed enthusiasm across semiconductor and AI-related stocks provided enough support to keep the S&P 500 and Nasdaq higher, even as mixed participation and weakness across several mega-cap names kept the advance contained.

U.S. Treasuries settled today's session mixed and little changed, surrendering a decent chunk of overnight gains in spite of a CPI report for July that was deemed market-friendly and a solid $42 billion 10-year note auction. The 2-year note yield settled down two basis points to 4.20%, and the 10-year note yield finished unchanged at 4.68%.

Reviewing today's data:

• Total CPI was up 0.1% month-over-month in July (Briefing.com consensus: 0.1%) following a 0.4% decline in June. That left the year-over-year rate at 3.4%, down from 3.5% in June. Core CPI, which excludes food and energy, was up 0.2% month-over-month (Briefing.com consensus: 0.2%) following an unchanged reading for June. On a year-over-year basis, core CPI was up 2.5% versus 2.6% in June.
  
  • The July CPI report, at the least, did not stoke "new" concerns that the Fed will have to raise rates at the September FOMC meeting. That is the key takeaway from the report, and it was embedded in the realization that this report came in as expected.
• The Treasury Department reported a $432.3 billion deficit for July versus a deficit of $291.1 billion for the same period in July 2025. Receipts totaled $334.0 billion, while outlays reached $766.3 billion.
  
  • The key takeaway from the report is that the net interest outlay exceeded the national defense outlay, which is saying something given that the U.S. is at war with Iran.

Thursday:

Stocks advanced on Thursday as a softer-than-expected July PPI report further eased Fed tightening concerns, while strength across mega-cap technology helped lift the S&P 500 to fresh record territory. The S&P 500 (+0.7%) crossed 7,800 for the first time and notched record intraday and closing highs, while the Nasdaq Composite (+0.8%) outperformed and the DJIA (+0.1%) eked out a modest gain.

July PPI was unchanged (Briefing.com consensus: 0.1%), while core PPI increased 0.2% (Briefing.com consensus: 0.3%), leaving both measures slightly below expectations despite modest upward revisions to the prior month's readings. Coming on the heels of Wednesday's in-line CPI report, the data reinforced the market's increasingly favorable view of the policy outlook. The shift was evident in fed funds futures, with the probability of a 25-basis-point rate hike at the September FOMC meeting now at 34.6%, according to the CME FedWatch tool. That compares with 40.6% just before this morning's PPI release and 55.0% a week ago.

The friendlier rate backdrop helped fuel another strong showing from growth stocks. The information technology sector (+1.0%) finished among the leaders, with memory stocks driving much of the early strength following positive takeaways from Sandisk (SNDK 1528.11, +183.82, +13.67%) investor day. Sandisk and Western Digital (WDC 487.29, +33.19, +7.31%) were among the top-performing S&P 500 components, while SK hynix Inc. (SKHY 165.65, +11.24, +7.28%) extended its August rebound and moved back toward its $170 July 10 IPO opening price after falling to post-IPO lows late last month.

Strength across the semiconductor group faded considerably during the afternoon, however, leaving the PHLX Semiconductor Index up just 0.5% after gaining more than 2.0% earlier in the session. Coherent (COHR 327.35, -28.29, -7.95%) was a notable laggard within the group following its earnings report. More broadly, the semiconductor retreat coincided with a sharp pickup in software stocks, suggesting some rotation within technology during the afternoon. The iShares Expanded Tech-Software ETF (IGV) jumped 3.1%, helped by an impressive surge in Workday (WDAY 206.45, +31.16, +17.78%) after Reuters reported that Silver Lake is in talks to acquire the company.

Mega-cap stocks also provided meaningful support after yesterday's weaker showing. The communication services sector (+1.6%) led all S&P 500 sectors as Meta Platforms (META 594.97, +16.12, +2.78%) ranked among the strongest "Magnificent Seven" names. Netflix (NFLX 78.24, +4.03, +5.43%) also advanced sharply following reports that Bill Ackman's Pershing Square fund established a new stake.

The real estate sector (+1.3%) was another standout as Treasury yields moved lower following the inflation data.

Oil provided another source of support, although the path lower was somewhat choppy. Crude moved around considerably without a meaningful geopolitical headline, contributing to the major averages' retreat from their opening highs before stocks recovered through the afternoon. WTI crude ultimately settled $2.20 lower (-2.6%) at $81.06 per barrel, while the energy sector (-0.1%) finished only modestly lower. 

The materials sector (-0.7%) was the day's weakest performer amid lower precious metals prices and weakness across fertilizer names.

Ultimately, Thursday's advance capped another constructive response to this week's inflation data, with softer producer prices further reducing expectations for additional Fed tightening and helping the S&P 500 establish fresh record highs. The afternoon rotation from semiconductors toward software kept technology firmly supportive even as the early chip rally faded, while lower Treasury yields and oil prices provided a favorable backdrop elsewhere in the market.

U.S. Treasuries took some solace in a July PPI report that reinforced the belief coming out of the July CPI report that the Fed won't be raising rates at its September FOMC meeting. The 2-year note yield settled down six basis points to 4.14%, and the 10-year note yield settled down four basis points to 4.64%. 

Reviewing today's data:

• July PPI 0.0% (Briefing.com consensus 0.1%); Prior was revised to -0.1% from -0.3%, July Core PPI 0.2% (Briefing.com consensus 0.3%); Prior was revised to 0.4% from 0.2%
  • The key takeaway from the report is that, like the CPI, it was devoid of "new" inflation-baked surprises. Headline and core readings trended in the right direction of disinflation, which is an appeasement for today's trading dynamic, but of course the inflation rates themselves remain on the high side and need to come down much more to appease inflation hawks.
• Weekly Initial Claims 209K (Briefing.com consensus 205K); Prior was revised to 200K from 199K, Weekly Continuing Claims 1.777 mln; Prior was revised to 1.799 mln from 1.801 mln
  • The key takeaway from the report is the 4-week moving average for initial claims running below 200,000 (currently 199,000), which is an historically low number consistent with a labor market that is light on layoff activity.

Friday:

Stocks ended a relatively quiet Friday session with modest losses, pulling back from yesterday's record-setting advance as weakness in mega-cap technology stocks and a midday rise in Treasury yields weighed on the major averages. The S&P 500 (-0.2%), Nasdaq Composite (-0.3%), and DJIA (-0.2%) finished lower, though the S&P 500 and Nasdaq Composite still notched modest gains for the week.

The major averages opened slightly higher before gradually slipping into negative territory as the morning progressed. The move coincided with a rise in longer-dated Treasury yields, with the 10-year note yield climbing six basis points to 4.70% despite a weaker-than-expected July retail sales report. The increase in yields provided a modest headwind following a week in which largely favorable CPI and PPI readings had eased concerns about additional Fed tightening.

Most of the pressure at the index level came from growth stocks. The Vanguard Mega Cap Growth ETF fell 0.5%, while the information technology sector (-0.4%) was among the laggards as some of yesterday's strongest areas gave back ground. The PHLX Semiconductor Index slipped 0.3%, with Applied Materials (AMAT 507.18, -27.36, -5.12%) facing some profit-taking following a solid earnings report and Broadcom (AVGO 392.99, -24.83, -5.94%) also among the large-cap chip laggards. Continued strength in memory stocks helped offset some of that weakness, as Sandisk (SNDK 1641.11, +113.00, +7.39%) extended its rally following yesterday's investor day after JPMorgan resumed coverage with an Overweight rating and a $2,250 price target.

Software stocks saw more pronounced profit-taking following yesterday afternoon's rally, leaving the iShares GS Software ETF (IGV) down 2.1%. Workday (WDAY 198.68, -7.77, -3.76%) also gave back some of yesterday's roughly 18% surge that followed reports that Silver Lake is in talks to acquire the company.

The consumer discretionary sector (-0.4%) also lagged amid weakness in mega-cap stocks and retail names ahead of a busy slate of earnings from the group next week.

Still, the broader market held up better than the major averages. Six S&P 500 sectors finished higher, and the S&P 500 Equal Weight Index ended flat, while the Russell 2000 (+0.5%) and S&P MidCap 400 (+0.3%) both advanced and reached fresh record highs during the session.

Energy (+1.4%) was the clear sector leader as crude oil resumed its climb despite little new geopolitical news. WTI crude settled $1.34 higher (+1.7%) at $82.40 per barrel, bringing its gain for the week to roughly 5%.

The utilities (+0.6%) and materials (+0.5%) sectors also outperformed, with higher precious metals prices supporting the latter.

Outside the current S&P 500 membership, Reddit (RDDT 177.97, +19.85, +12.55%) surged on news that the company will join the index next week.

Friday's subdued pullback ultimately looked more like consolidation following Thursday's record-setting advance than a meaningful shift in sentiment. The S&P 500 still finished the week higher after the July CPI and PPI reports helped ease concerns about additional Fed tightening, while the relative strength in the equal-weight index and smaller-cap stocks showed that Friday's weakness was concentrated largely in some of the market's biggest growth names.

U.S. Treasuries retreated on Friday, producing losses for the week in 10 and 30 year note yields while the front end also faced some pressure today, but the 2-year note still ended the week with a gain. The 2-year note yield settled up three basis points to 4.17% (-4 basis points this week), and the 10-year note yield settled up six basis points to 4.70% (+4 basis points this week). 

Reviewing today's data:

• July Retail Sales -0.6% (Briefing.com consensus 0.2%); Prior 0.2%, July Retail Sales, ex-auto -0.3% (Briefing.com consensus 0.2%); Prior -0.2%
  
  • The key takeaway from the report is that control retail sales dropped 0.4% month-over-month. This figure will feed into GDP forecasts, so there are apt to be some downward revisions to Q3 GDP forecasts.
• June Business Inventories 0.0% (Briefing.com consensus 0.1%); Prior was revised to 0.4% from 0.3%
• August Univ. of Michigan Consumer Sentiment - Prelim 51.0 (Briefing.com consensus 54.5); Prior 55.2
  
  • The key takeaway from the report is that only 8% of all consumers surveyed expect their income growth to exceed inflation in the year ahead. That expectation could ultimately translate into lower discretionary spending activity.