OUR APPROACH
OUR APPROACH
Insights
August 10, 2026
Market Highlights
July was a volatile, but ultimately resilient month for equities. There were several sharp selloffs throughout the month, but strong AI-driven earnings from major technology companies helped to offset macroeconomic concerns, including elevated inflation and geopolitical tension. The S&P and Dow Jones ended the month essentially flat. The Nasdaq was down roughly 3.2% as investors rotated away from some technology names prior to earnings reports. Despite the Nasdaq’s underperformance, the broader market remained steady thanks to continued AI enthusiasm, strong corporate profits, and generally stable economic growth.
Of the asset classes we follow, the best performing one for the month was Commodities (Bloomberg Commodity Index) with a 7.2% return. The worst performing was Growth Stocks (Russell 3000 Growth) with a -4.8% return. July saw a sharp rise in Treasury yields. Higher yields put pressure on equity valuations, particularly for growth stocks whose valuations depend heavily on expected future profits. As Treasury yields climb, growth stocks face headwinds because higher rates make future earnings less attractive relative to safer investments, like bonds. This became one of the primary market concern narratives in July.
S&P groups similar companies into 11 sectors; when we dig into the S&P 500's performance, we find that 7 of the sectors were up, 2 of them were up by more than 5%. Four sectors were down.
The best performing sector was Energy with a 12.5% return. The biggest contributor to this outperformance was ExxonMobil Holdings Corp., which is the largest stock in the sector and had a return of 13.7%. The second best performing sector was Financials with a 6.0% return. The biggest contributor to this outperformance was JPMorgan Chase & Co., the largest stock in the sector, with a return of 7.5%.
Information Technology posted the worst return at -3.5%. The biggest contributor to this underperformance was Micron Technology, Inc., which is the fifth largest stock in the sector and had a return of -28.7%. The second worst performing sector was Industrials with a -3.1% return. The biggest contributor to this underperformance was Caterpillar, Inc., which is the largest stock in the sector and had a return of -23.5%.
Thoughts From the Team
This month, we wanted to share with you some of the macro economic data we regularly review to better understand where the economy might be headed. While no one can predict where the economy will go, this collection of data is generally considered a good group to give economists a read of how the economy is functioning under the surface.
The chart below shows quarterly data for the last 3 years. You can see below, the data have generally strengthened in 2026 after weakening in the second half of 2025. The most recent readings are mixed, business activity and consumer spending look strong, however consumer sentiment (generally highly correlated to gas prices) and the housing market look weak. Overall, economic growth remains resilient though uneven. We will be watching to see if the data continues to strengthen over the second half of 2026.
Before we sign off for the month, we are excited to let you know that we have officially welcomed a new member to our team! If you have called recently, or stopped by the office, you have likely already met April. She is our new Administrative Assistant and will be working closely with Cathy to help our office run smoothly and to better serve you. We look forward to everyone having a chance to meet her!
Be Well,
Disclaimers
The information contained herein, including summary/prices/quotes/statistics have been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Any comparison to a benchmark is for comparative purposes only and actual account composition may differ. Investments cannot be made directly into an index. Past performance is not indicative of future results. Past results are not indicative of future returns. This material is provided for informational purposes only and is not intended as and may not be relied on in any manner as, legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security. This material does not intend to address the financial objectives, situation or specific needs of any individual investor.
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