Market Recap - Thursday August 13, 2026
Stocks Reach New Highs as Inflation Data Helps Ease Rate Concerns
Stocks finished higher today, with the S&P 500 gaining 0.65%, the Nasdaq rising 0.81%, and the Russell 2000 adding 0.24%. The Dow was up a modest 0.13%. Both the S&P 500 and Russell 2000 reached fresh record closing highs, while gains were fairly broad across the market.
Technology and AI-related stocks were again among the leaders. Semiconductor, memory, and data-center stocks performed well as another round of corporate earnings reinforced the view that demand for AI infrastructure remains strong. SanDisk rallied after outlining an optimistic longer-term growth outlook, while Cisco reported another quarter of strong orders, helped by networking and AI-related demand.
The economic news was also supportive. July producer inflation, which measures prices businesses receive for their goods and services, came in slightly cooler than expected. Core producer prices rose 0.2% for the month, while the annual rate slowed to 4.2%. Combined with yesterday’s relatively benign consumer inflation report, the data provided further evidence that inflation pressures are not accelerating sharply.
That helped push Treasury yields lower and reduced expectations for additional Federal Reserve rate hikes. Markets are now pricing roughly a one-in-three chance of a September rate increase, down considerably from earlier in the week. Several Fed officials remain concerned that inflation is still too high, but the latest data gives policymakers more room to remain patient.
Lower oil prices also helped. Crude fell 2.3% as investors continued to assume that diplomacy will ultimately prevent a significant escalation in the U.S.-Iran conflict. Negotiations remain difficult and uncertainty around the Strait of Hormuz has not disappeared, but the absence of renewed large-scale fighting has kept energy markets relatively contained.
Beyond technology, airlines, homebuilders, building-material companies, restaurants, financial firms, and other economically sensitive areas also performed well. That broader participation is encouraging because it suggests the market’s gains are not being driven exclusively by a small number of large technology companies.
Here’s Our Take
Today’s market continues to reflect a fairly supportive combination of strong corporate earnings, gradually improving inflation, and lower interest-rate pressure.
The most important development this week has been inflation. Neither consumer nor producer prices showed the kind of acceleration that would force the Fed into an immediate response. Inflation is still above the Fed’s 2% long-term goal, so the debate over future rate hikes is not over, but the case for acting quickly has weakened.
At the same time, the AI investment cycle continues to show considerable strength. The conversation is gradually shifting from simply asking how much companies are spending to asking whether those investments are producing attractive returns. Recent earnings have provided encouraging evidence through stronger orders, expanding backlogs, higher pricing, and improving economics across parts of the data-center ecosystem.
There are still reasons for caution. Market valuations are elevated, investor optimism has increased, geopolitical risks remain unresolved, and the Fed could become more aggressive again if inflation turns higher. But for now, strong earnings and easing inflation pressure are giving investors enough confidence to keep pushing stocks higher and importantly, participation in the rally is beginning to extend beyond just the largest technology companies.
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