U.S. equities pulled back last week following three consecutive weeks of gains, as higher Treasury yields, rising oil prices, and renewed geopolitical concerns created some late-summer volatility. The S&P 500 declined 1.4%, the Nasdaq fell 2.1%, and the Dow lost 0.8%, although all three indexes rallied on Friday, finishing well above their weekly lows. Importantly, year-to-date returns remain firmly positive, with the S&P 500 up 13.0%, the Nasdaq 13.1%, and the Dow 12.0%. Long-term interest rates were the primary concern for investors, with the 10-year Treasury ending the week at 4.72% and the 30-year Treasury at 5.27%. Despite the week’s pullback, economic fundamentals remain encouraging. U.S. business activity showed continued strength, corporate earnings remain healthy, and Friday’s rebound demonstrated that investors are still willing to buy into market weakness. Our thesis remains unchanged: a resilient consumer, growing corporate profits, and continued economic expansion provide a solid foundation for markets. Periodic pullbacks and market volatility are normal, particularly after the strong gains we have seen this year, and long-term investors continue to be rewarded for staying patient and disciplined.

U.S. & Global Economy

• Economic data last week continued to support our view that the U.S. economy remains on a solid footing. Business activity accelerated in August, with the S&P Global Composite PMI rising to 56.0 from 54.5, led by continued strength in the important services sector. The labor market also remains healthy despite slower job creation, with initial unemployment claims falling to just 206,000, suggesting businesses remain reluctant to reduce headcount. Meanwhile, the Conference Board’s Leading Economic Index rose 0.2% in July, turning positive on a six-month basis and providing another encouraging signal for future growth. Overall, the data continues to point toward economic expansion rather than recession. Consumers are still working and spending, businesses are growing, and corporate profits remain strong, an encouraging combination as we move into the final months of 2026.

Policy and Politics

• Global tensions continued to influence energy markets and investor sentiment last week, with the Middle East remaining the most immediate concern. Efforts to reach a lasting agreement with Iran have made little progress, while restrictions on shipping through the Strait of Hormuz continue to disrupt global oil supplies. The pressure was evident in energy markets, with WTI crude rising nearly 7% for the week to roughly $87 per barrel, and Brent finishing above $94 per barrel. The Russia-Ukraine war also remains far from a lasting settlement, while diplomatic efforts in Gaza continue amid renewed tensions across the region. At the same time, competition between the U.S. and China over trade, technology, and global influence remains an important longer-term economic issue. Given all this geopolitical noise, markets have remained remarkably resilient and continue to look beyond many of today’s conflicts toward eventual solutions. Some of those solutions, particularly in Ukraine and the Middle East, may still be a long way off, reinforcing our view that investors should remain focused on economic fundamentals rather than global tensions and the resulting noise.

Looking ahead, investors will have a lighter earnings calendar and more time to focus on the economy, interest rates, and geopolitical developments. One notable exception will be NVIDIA, which reports earnings this Wednesday. Given NVIDIA’s significant role in the artificial intelligence investment cycle and its importance to the broader technology sector and market indexes, the results and outlook will be closely watched for insight into the strength and sustainability of AI-related spending. With the second-quarter earnings season largely behind us, attention will also shift toward upcoming inflation, employment, and consumer data for evidence that the U.S. economy remains on a solid growth path. The recent rise in oil prices warrants close watch, as higher energy costs could slow the recent decline in inflation and complicate the outlook for interest rates. At the same time, slower job growth suggests the labor market is cooling but remains healthy overall. Overseas, developments in the Middle East, Ukraine, and global energy markets will continue to generate headlines and periodic volatility. We expect markets to remain sensitive to incoming data and NVIDIA’s results, but our outlook remains constructive. Healthy consumers, strong corporate earnings, and a solid banking system continue to support economic expansion. Investors should expect some bumps along the way but remain diversified, disciplined, and focused on their long-term investment plans. As always, please contact your team at Valley National Financial Advisors with any questions.

Economic Numbers to Watch This Week

• U.S. New Home Sales for July 2026, prior 628K
• U.S. Conference Board Consumer Confidence for August 2026, prior 90.8
• U.S. Durable Goods for July 2026, prior 0.3%
• U.S. 2nd Estimate GDP for 2Q 2026, prior 1.5%
• U.S. Personal Income, M/M% for July 2026, prior 0.2%
• U.S. Consumer Spending, M/M% for July 2026, prior 0.3%
• U.S. PCE Price Index, M/M% for July 2026, prior -0.1%
• U.S. PCE Price Index, Y/Y% for July 2026, prior 3.7%
• U.S. PCE Core Price Index, M/M% for July 2026, prior 0.1%
• U.S. PCE Core Price Index, Y/Y% for July 2026, prior 3.3%
• U.S. Initial Jobless Claims for Week Ended August 22, 2026, prior 206K
• U.S. U. Michigan Final Consumer Survey for August 2026, prior 55.2%

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