Weekly Commentary (08/03/2026) - A Strange, Turbulent, Surprisingly Positive Week
Weekly Commentary (08/03/2026) - A Strange, Turbulent, Surprisingly Positive Week
Index / Commodity Change Last Week Level
DJIA 1.04% 52,485
S&P 500 1.06% 7,490
NASDAQ 1.60% 3,979
Russell 2000 0.05% 2,931
MSCI EAFE 2.02% 3,176
MSCI EM 2.36% 1,666
Bloomberg Aggregate -0.12% 2,333
10 Year Treasury 6 bps 4.75%
Oil -5.20% $84.67
Gold -0.53% $4,049.10
Despite white knuckle volatility, confusing central bank messaging, geopolitical uncertainty, and a major tech stumble, U.S. equities finished the week higher. Last week’s markets were defined by hawkish central banks, surging long-term yields, and a dramatic late week rescue from Big Tech, all against a backdrop of sluggish economic data and rising geopolitical tension.
The market’s resilience came despite a few major shocks:
The Warsh Press Conference Meltdown
Federal Reserve Chair Kevin Warsh delivered one of the most confusing and contradictory press conferences in recent memory.
• He insisted the Fed’s inflation target is firmly 2%…
• …while simultaneously arguing that both falling and rising bond yields were evidence of Fed credibility.
• He refused to give forward guidance, claiming he needs “direct and unfiltered” market feedback—yet interpreted that feedback inconsistently.
The result: A credibility shock. Markets initially rallied on the Fed’s decision to hold rates, then reversed violently, with the S&P 500 dropping 1.7% in the final hour Wednesday.
Meta’s Earnings Faceplant
Meta reported:
• Disappointing earnings
• A massive 2026 capex forecast of $130B–$145B
• No guidance for 2027 spending
• Rising credit default swap spreads (higher perceived debt risk)
Shares fell 9%, and even before earnings, traders were already nervous.
Situational Awareness Hedge Fund Blowup
• Situational Awareness, run by 24-year-old wunderkind Leopold Aschenbrenner, ballooned to $45B in July on leveraged AI themed trades.
• When markets moved against him, positions were forcibly liquidated.
• Citadel stepped in to buy the portfolio for ~$6 billion.
This raised uncomfortable questions about how much of the AI rally has been driven by inexperienced, overleveraged traders. Leverage at Situational was said to be 3-4 times.
Fortunately, two blue-chip Mega-caps came through with outstanding earnings and reversed the damage:
• Microsoft surged on 43% Azure growth, one of the largest single day value gains ever.
• Amazon jumped ~15% on reaccelerating cloud revenue.
• These two earnings reports single handedly pulled the indexes back into the green, despite weakness in semiconductors and a steep 7% drop in Apple tied to memory shortages.
Economic News: Sluggish Growth, Sticky Inflation, Rising Yields
Economic data released last week painted a picture of moderate growth with persistent inflation pressures:
• U.S. GDP grew 1.5% in Q2, slowing from 2.1% in Q1. Consumer spending rose 3.2%.
• Mortgage rates hit a one year high, with the 30-year fixed at 6.66%.
• Consumer confidence slipped to 90.8 amid rising gas prices and Middle East tensions.
• Oil prices climbed toward $85 (WTI) as U.S.–Iran hostilities escalated.
• The Fed held rates, but long-term yields spiked:
10-year Treasury: 4.75%
30-year Treasury: 5.28% (19 year high)
Globally, central banks in the UK and Japan also held rates, but hawkish dissents increased. China’s factory and services PMIs slipped into contraction, adding pressure on Beijing to stimulate demand.
The Week Ahead: Jobs, Earnings, and Inflation Risks
Markets now face a critical data heavy week that could reshape rate expectations:
• Friday: July nonfarm payrolls (consensus: +85,000 jobs)
A print above 100,000 could revive rate hike chatter.
• ISM manufacturing & services PMIs (Mon & Thu)
• Major earnings: Earnings have been strong across the board; according to FactSet, S&P 500 companies are set to report a record net profit margin of 15.7% for the second quarter. Among the companies reporting this week are Palantir, AMD, Disney, Caterpillar, and SpaceX (first public earnings).
• China CPI and inflation data (global demand implications).
Market Themes
• Fed credibility: Will officials attempt to clarify Warsh’s messaging?
• Bond yields: Continued volatility could pressure equities.
• AI spending narrative: Can more companies show Amazon/Microsoft style payoff?
• Geopolitics: Oil remains a major inflation wildcard.
Bottom Line
Last week was a case study in market resilience:
• Confusing Fed communication
• A major tech stumble
• A hedge fund blowup
• Rising geopolitical risk
Yet markets rose, powered by strong earnings and investor belief that the economic plane is still airborne.
Markets are entering a seasonally weak period (August – October), particularly during mid-term election years, so investors shouldn’t be surprised if markets take a breather for a while. Sticking close to a long-term asset allocation plan is the best course of action.
"Deep summer is when laziness finds respectability." – Sam Keen (American author and philosopher)
Enjoy the last month or so of summer!
Sources Market data: J.P. Morgan Asset Management, Weekly Market Recap, Month 03, 2026. Index returns, yields, key rates, and commodity prices as cited in the Weekly Data Center. All equity returns represent total return for stated period. Oil and Gold: Wall Street Journal Markets Digest, August 03, 2026. Economic data: MarketWatch.com. Charts and portfolio data: YCharts.com.
NDS Wealth Advisors believes these sources are reliable but cannot guarantee the accuracy or completeness of third-party data and assumes no liability for errors or omissions.
Disclosures This material is for informational and educational purposes only and should not be relied upon as investment, legal, or tax advice, or a recommendation of any particular security, strategy, or investment product. Any economic forecasts or market outlooks expressed herein are forward-looking statements, subject to change without notice, and may not materialize. Investors cannot invest directly in an index. Index returns do not reflect the deduction of fees, commissions, or expenses, which would reduce overall performance. Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. This material does not consider the investment objectives, financial situation, or unique needs of any individual investor. Consult your financial advisor before making any investment decisions.