Weekly Macro Report, August 9 2026

The S&P 500 was up 14.87% quarter-to-date to 7,499.36 on Jun 30, 2026, signaling strong risk appetite. U.S. GDP grew at a 1.5% annual rate in Q2 2026 after 2.1% in Q1, while the Fed funds effective rate has held at 3.50%-3.75% since March. Fed funds futures imply roughly 4.0% by year-end 2026, pointing to firmer inflation pressure, slower near-term growth, and a labor market that is likely to remain tight.

The labor market weakened in July 2026: payrolls fell 23,000 and the unemployment rate slipped to 4.1% on Aug. 7, while initial claims were 199,000 in the week ended Aug. 1. Combined with recent downward payroll revisions, this points to cooler hiring momentum and should keep the Fed biased toward holding or cutting rates rather than hiking.

As of Aug. 7-8, 2026, Treasury yields were mixed: the 10-year sat near 4.65%-4.69% and the 30-year near 5.19%-5.21%, keeping long borrowing costs elevated for households, companies, and investors. The ICE BofA U.S. corporate index yield was 5.39% on Aug. 6, while the average 30-year mortgage was 6.66%-6.76% on July 30-Aug. 8, still pressuring homebuyers even as bond investors receive stronger income.

As of 2026-08-07, the US yield curve is positive, with 2s10s at 0.46 pp, and the 10Y TIPS real yield at 2.43% on 2026-08-06, both pointing to firm growth expectations. US credit spreads remain tight at about 78 bps for investment-grade and 275 bps for high yield, signaling strong risk appetite.

As of May/June 2026, U.S. inflation momentum is still above peers: headline CPI was 4.2% y/y in May, core CPI 2.9% y/y in May and 2.6% in June, both running hotter than many advanced-economy norms. CPI gains were led by energy, transportation, and shelter; PPI fell 0.3% in June, which often leads CPI, while the 10-year breakeven near 2.26% on Jul. 24 signals inflation expectations priced into TIPS bonds remain anchored.

M2 was 5.58% y/y in May 2026 and 6.43% y/y in July 2026, while CPI inflation was 2.7% y/y in December 2025 and about 3.9% on the Minneapolis Fed’s 2026 estimate. Liquidity is growing faster than trend growth, so the mix is mildly inflationary, but not runaway. The main M2 driver is the recent rise in broad bank deposits and retail money-fund balances after the 2023 contraction.

July 2026 University of Michigan sentiment improved: the headline index rose to 55.2, current conditions to 54.8, and expectations were 55.4, leaving a narrow -0.6 spread. Compared with June 2026, both current and expected views moved up, while the 10Y-2Y US yield curve remained inverted in late July, keeping recession-risk pricing above the surface.

In June 2026, existing-home prices hit a record $440,600, while total sales fell and new-home sales held at a 628,000 annual rate. Inventory rose to 1.56 million units, or 4.6 months’ supply, and 30-year mortgage rates were still about 6.66% to 6.75%, leaving demand constrained and affordability stretched.

As of Aug. 7, 2026, Technology led the 11 sector ETFs on YTD performance, with XLK up 30.6%, while Energy was the day’s laggard at -1.13%; XLY also led the session at +1.49%. XLK’s strength still reflects AI/semiconductor demand, while XLE’s weakness tracked softer oil-linked momentum; XLC remains the weakest YTD at -5.5%, despite a modest rebound.

As of 7 Aug 2026, U.S. valuations remain stretched: the S&P 500 P/E is 29.9 and Shiller PE is 42.4, both far above long-run norms.[2][17] The Buffett Indicator is 242%, confirming a large premium versus global peers; the gap is still led by U.S. mega-cap AI/tech dominance, superior profit growth, and heavier index concentration than in most international markets.[15][30]

As of Aug. 7, 2026, the VIX fell to 14.90, down 1.65% day over day and 10.08% from a year earlier. Recent factor leadership is still skewed toward Momentum and Growth, while Value, High Dividend Yield, Minimum Volatility, Equal Weight, Small Cap, and Risk Weighted have lagged. This mix points to a narrow, risk-on market with investors still paying for trend and growth over broader participation or defensive exposure.

As of February 2026, global equities were led by Japan and the UK, while the US lagged as investors rotated out of mega-cap technology. Japan’s Nikkei 225 gained 8.6% and the UK’s FTSE 100 rose 3.3%, versus the S&P 500’s 0.8% decline, signaling a broad shift away from US leadership. This dispersion points to a market favoring non-US value, cyclicals, and Asia-linked exposure over long-dominant US growth.

Gold rose 3.55% week over week to $4,399.70/oz on Aug. 6, while spot held near $4,341.56 on Aug. 7, as safe-haven demand stayed firm amid geopolitical risk and central-bank buying. [1][20] Base metals gained 3.9% month over month in April, led by weaker USD conditions and supply disruptions tied to the U.S.-Iran conflict and China’s May halt to sulphur exports, which tightened copper, lead, nickel and zinc output. [10]

Bitcoin is trading around $64.98K and Ethereum near $1,922 as of Aug. 7–9, 2026, leaving BTC firmly in control while ETH remains a smaller share of the market. The broader crypto market cap is about $2.3T, with Bitcoin dominance near 56.6% and stablecoins at roughly 13.1%, showing capital concentrated in BTC and cash-like assets.

As of Aug 7-8, the dollar held near 99.6 on the DXY, while the euro sat near $1.15, the pound around $1.35, the yen near 156/$, and the yuan near 6.74/$; the CAD, AUD, CHF, and NZD were mixed but not all series were available. A firmer dollar tightens global trade finance and capital flows, while yen weakness and yuan strength signal diverging policy pressure; softer sterling and commodity FX point to inflation imports and keep the Fed, BoE, and PBoC in focus.

As of Q1 2026, U.S. federal debt is 122.6% of GDP, versus 50.3% in the euro area and 115.8% in Japan; the U.S. household ratio is 68.1% in Q4 2025, above the euro area’s 50.3% and below Australia’s 113.2%. Corporate debt data are not available here. The key risk is elevated interest-cost sensitivity: higher refinancing rates can crowd out fiscal space and pressure equity and credit valuations, pushing policymakers toward tighter budget discipline and investors toward higher duration and credit-risk premiums.

In the month ahead, Aug. 12 CPI and Aug. 28 PCE will be the key inflation reads; hotter prints would keep the Fed cautious on rate cuts, while cooler data would support easing. Aug. 14 Initial Jobless Claims and Aug. 29 JOLTS will show whether labor demand is holding up; firm jobs data argues for higher-for-longer rates. Sep. 16 Fed Funds Tgt Rate decision will likely hinge on that mix.