📊 Week in Numbers
S&P 500 ▲ 7,800+: First all-time high at this level
Russell 2000 ▲ 3,045.48: Record close, up 22.7% YTD
2-Year Treasury ▼ 4.13%: Lowest since mid-July, Fed bets cooling
WTI Crude ▲ $82/bbl: Middle East tension holding the floor
Gold ▲ ~$4,405/oz: Dollar weakness doing the heavy lifting
Bitcoin ▼ ~$62,800: Sat out the rate-relief rally
📈 EQUITIES
Photo: Atlantic Ambience
S&P 500 Clears 7,800 as CPI Eases Rate-Hike Fears
Thursday's close above 7,800 was the first in history, and it had a very specific trigger. July CPI came in at 0.1% month-on-month and 3.4% year-on-year, core held at 2.5% annually, and a day later PPI landed flat. September rate-hike odds fell from around 54% to near 30%. Markets did the rest.
VIX dropped to ~14.56, its lowest since January, signalling the calmest market environment of 2026
~85% of S&P 500 companies that reported Q2 earnings beat analyst expectations, giving the rally a fundamental base, not just a macro story
Mortgage rates are unlikely to rise further in the near term, giving homebuyers a small window of breathing room
💬 Your index fund just had its best week of the year.
📈 EQUITIES
Photo: Rafael Minguet Delgado
Russell 2000 Hits Record, Up 22.7% YTD, Leading S&P by 9.5pts
Small-caps broke out this week, and the reason matters. Companies in the Russell 2000 carry more floating-rate debt than their large-cap peers, so when rate-hike odds collapse, they feel it faster and more directly. The index closed at a record 3,045.48 on Wednesday, and kept adding on Thursday after PPI confirmed the story.
Russell 2000 up 22.7% year-to-date, outpacing the S&P 500 by 9.5 percentage points
The broadening is the point: analysts called this a sign the 2026 bull market is spreading beyond mega-cap tech
Small business owners may find borrowing costs less punishing if the Fed holds through autumn
💬 When the whole market rallies together, not just the big names, that's usually a healthier sign.
🏦 MACROECONOMIC
Photo: Miles Burke
CPI 3.4%, PPI Flat: Fed September Hike Odds Collapse
Two reports, 48 hours apart, did what months of Fed watching hadn't quite managed. CPI matched forecasts. PPI came in below them. The 2-year yield fell 6 basis points to around 4.13%. And the September FOMC meeting, which had looked like a live hike just a week ago, started to look much quieter. Morgan Stanley's chief economic strategist said the data keeps the "no need to hike" case intact. One more round of data before the September meeting will be the final word.
July FOMC voted 9-3 to hold, with three dissenters already pushing for a hike — the soft data matters at the margin for those three
Annual PPI fell to 4.7% from a revised 5% in June, a meaningful directional shift
Variable-rate debt holders — credit cards, home-equity loans — are less likely to see rates climb further this autumn
💬 A September hike was 54% likely a week ago. Now it's closer to 30%. That's a big swing in a short time.
📈 EQUITIES
Photo: Rafael Minguet Delgado
Reddit Surges 12.6% on S&P 500 Index Inclusion
Late Thursday, S&P Dow Jones Indices confirmed Reddit joins the S&P 500 before the open on August 18. Shares jumped more than 10% in after-hours trading and closed Friday at $178.09, up 12.6% on the week. The mechanism is mechanical: trillions of dollars in passive funds track the index, and every one of them now has to buy Reddit. The company is also pitching itself as the anti-AI play in advertising, arguing that users tired of AI-generated content are gravitating toward Reddit's human-written discussions.
Inclusion is off-cycle, reflecting Reddit's growing market cap and sustained profitability since going public
Steve Huffman's framing: human-curated content is becoming more valuable precisely because AI content is everywhere
💬 If you hold an S&P 500 index fund, you'll own Reddit from Monday morning without doing anything.
🛢️ COMMODITIES
Photo: Pixabay
Oil Above $82, Iran Tensions Keep Energy Prices Elevated
The inflation data was good. Oil didn't care. WTI climbed back above $82 a barrel on persistent Middle East tensions, faltering ceasefire talks, and a U.S. naval blockade of Iranian ports that officials said could continue indefinitely. The 30-year Treasury yield hit 5.237% during the week, a sign that bond markets are pricing a very different world than the one equity markets celebrated. Applied Materials fell more than 4% on Friday partly on input-cost concerns. Retail sales came in softer than expected.
Brent had approached $90/barrel earlier in August before moderating, a reminder of how quickly the energy picture can shift
Petrol and diesel prices remain elevated, pushing up transport and grocery costs for households
💬 Stocks celebrated cooler inflation all week. Oil quietly reminded everyone that one part of the bill isn't getting cheaper.
🧵 Inflation Relief Unlocks a Broad Market Rally
Two softer-than-expected inflation prints on back-to-back days were enough to reprice the entire Fed path for autumn. The S&P 500 and the Russell 2000 both set records in the same week. That breadth matters. When only the biggest tech names carry a rally, you can argue it's fragile. When small-caps and large-caps are moving together on the same macro logic, the case for durability gets stronger.
🧵 Middle East Risk vs. Rate Relief: A Tug-of-War
Equities near all-time highs. The 30-year Treasury yield near 5.24%. Those two things coexisting in the same week tells you something about where the real disagreement is. Equity investors are pricing a soft landing. Bond investors are pricing persistent inflation, elevated deficits, and a geopolitical risk premium that doesn't resolve quickly. Heading into Jackson Hole, that tension doesn't look like it's going anywhere.
🧵 AI Trade Broadens: From Chips to Platforms
The AI story kept expanding this week. CoreWeave added a read on cloud infrastructure demand. Best Buy got upgraded on AI-driven appliance and wearables cycles. Reddit's S&P 500 case was partly built around monetising human content in a world drowning in AI output. Investors are clearly searching for the next layer of beneficiaries beyond the semiconductor stocks that led the first wave. That search is getting wider.
👀 What to Watch Next Week
Reddit (RDDT) S&P 500 Inclusion, Monday August 18: Trillions in passive funds buy at the open. Expect volatility in the stock and potentially in related ETFs.
FOMC Minutes, Wednesday August 20: The full reasoning of the three July dissenters gets released. Any hawkish language could revive rate-hike fears just as markets have priced them out.
Jackson Hole Symposium, Thursday August 27 to Saturday August 29: Powell's keynote is the most consequential Fed communication of the summer. With September odds near 30% and the FOMC split, every word will be parsed. This one sets the tone for autumn.
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Not investment advice. For informational purposes only.