Market Recap - Wednesday August 12, 2026
Stocks Edge Higher as Inflation Comes In as Expected
Stocks finished mostly higher today, with the S&P 500 gaining 0.26%, the Nasdaq rising 0.54%, and the Russell 2000 up 0.61%. The Dow was essentially flat, slipping 0.04%. Trading remained relatively quiet, but technology and AI-related stocks were among the strongest areas of the market.
The biggest economic news was July inflation, which came in largely as expected. Core inflation, which excludes food and energy, rose 0.2% for the month and slowed to 2.5% from a year ago. Headline inflation increased 0.1% and eased to 3.4% annually. Shelter costs remained one of the main sources of inflation, while energy prices declined.
For investors, the important takeaway was that inflation did not surprise to the upside. That reduced some of the pressure on the Federal Reserve to raise interest rates again soon. Expectations for a September rate hike fell to roughly 40% following the report, and Treasury yields moved modestly lower.
AI stocks were another bright spot. CoreWeave, Nebius, Super Micro Computer, and Lumentum all rallied sharply after results reinforced continued demand for computing power, networking equipment, memory, and data-center infrastructure. CoreWeave reported a backlog of more than $100 billion, while several companies highlighted improving pricing, strong order visibility, and continued shortages in key components.
That helped reinforce one of the market’s most important themes: despite ongoing questions about how much money the largest technology companies are spending on AI, the underlying demand for AI infrastructure remains extremely strong. Investors are increasingly looking for evidence that companies can turn that spending into attractive returns, and several of Wednesday’s earnings reports offered encouraging signs.
The Middle East remained a source of uncertainty, but it had little impact on markets today. Negotiations surrounding the Strait of Hormuz remain difficult, with little evidence of meaningful progress between the U.S. and Iran. Still, military activity has remained relatively contained recently, which has helped prevent another sharp move higher in oil prices.
Here’s Our Take
Today’s inflation report was probably the best outcome the market could have hoped for: inflation is still above the Fed’s 2% target, but it is not reaccelerating in a way that forces policymakers to act immediately.
That gives the Fed more flexibility, particularly after the recent slowdown in job growth. The labor market has weakened enough to make additional rate hikes harder to justify, while inflation has improved enough to allow policymakers to remain patient. The question now is whether that trend continues over the next few months.
At the same time, the AI investment cycle continues to provide a powerful source of earnings growth and business investment. Today’s results from companies tied directly to data centers and computing infrastructure suggest demand remains strong. The market is becoming more selective, however. Investors increasingly want to see real contracts, improving margins, and evidence that the enormous capital being invested can generate attractive returns.
Overall, the backdrop remains constructive: earnings are strong, inflation is gradually improving, and economic activity remains relatively resilient. But with valuations elevated and the market increasingly sensitive to interest rates, continued progress on inflation will be important if stocks are going to sustain their recent gains.
P.S. Know someone who’d appreciate smarter stock insights and clearer investing strategies? Forward this email or share this link: subscribe.triplegains.com
Triple Gains - Stock Analysis - Thematic Insights - Portfolio Strategy
DISCLAIMER: The content provided in this newsletter does not constitute investment advice, financial advice, trading advice, or any other form of personal recommendation. Nothing in this newsletter should be interpreted as a suggestion to buy, sell, or hold any investment or security. All content is for general informational purposes only and should not be relied upon for making investment decisions. Readers should conduct their own research and consult qualified financial advisors before making any investment decisions. To read our full disclaimer, click here.