U.S. equities resumed their advance last week, with the S&P 500 and Dow gaining 0.5% and the Nasdaq rising 0.8%. Year-to-date returns remain solidly in double digits, with the S&P 500 up 12.7%, the Nasdaq 13.6%, and the Dow 11.4%. Investor enthusiasm surrounding artificial intelligence (AI) remained an important market driver, helped by another strong earnings report from Nvidia and continued evidence of significant technology investment. Attention shifted toward interest rates late in the week after Federal Reserve Chair Kevin Warsh reiterated the Fed’s commitment to bringing inflation back toward its 2% target, pushing expectations for another rate increase higher. The 10-year U.S. Treasury ended the week at 4.73%. Despite the ongoing debate over inflation and interest rates, the bigger picture remains encouraging. Consumers are working and spending, corporate profits remain strong, and the economy continues to expand. Markets will always encounter periods of volatility, but the fundamental backdrop remains constructive.

U.S. & Global Economy

• The latest economic data continue to point to a U.S. economy that is growing at a steady, if somewhat slower, pace. Second-quarter GDP expanded at a 1.5% annual rate, with consumers remaining an important source of support for the economy. The labor market also remains healthy despite slower hiring, with weekly unemployment claims falling to just 203,000, indicating that businesses are still holding onto workers. Inflation remains the bigger challenge, with the Fed’s preferred PCE measure holding at 3.7% in July and core inflation at 3.3%, both still above the Fed’s long-term target. Globally, growth remains uneven but generally resilient. Overall, our view remains constructive; consumers are working and spending, corporate profits are growing, and the economy continues to expand. While inflation and interest rates warrant close watch, the fundamental backdrop remains supportive as we head into the final months of 2026.

Policy and Politics

• Geopolitical risks remain elevated, but markets received some encouraging news from the Middle East last week. Oil prices fell sharply as shipments through the Strait of Hormuz improved and investors grew more optimistic that Iran, Oman, and other regional players could eventually reach an agreement allowing more energy supplies to reach global markets. WTI crude declined about 4% for the week to $83.40 per barrel, while Brent fell more than 5% to $89.31. Importantly, a broader agreement has not been reached, leaving energy markets vulnerable to shifting headlines. Elsewhere, Russia and Ukraine remain far apart, with fighting continuing and little evidence that a lasting settlement is close. U.S.-China competition over trade, technology, and global influence also remains an important longer-term issue. Despite these geopolitical challenges, financial markets continue to demonstrate resilience and generally look beyond today’s headlines toward eventual solutions.

Investors will turn their attention to corporate earnings and the labor market this week as Dell, Broadcom, Palo Alto Networks, and Snowflake report results. Their earnings should provide further insight into technology spending, artificial intelligence demand, cybersecurity, and enterprise software activity. Attention will also center on Friday’s August employment report, with investors looking for signs that the labor market continues to cool without weakening materially. A gradual moderation in hiring would support the view of sustainable economic growth, while a sharper slowdown could increase expectations for Federal Reserve rate cuts. Meanwhile, the still-volatile situation with Iran remains a source of uncertainty and could contribute to renewed volatility in oil prices and inflation expectations. Despite these risks, resilient corporate earnings, and a relatively healthy economy keep our outlook constructive, although investors should 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. Manufacturing PMI for August 2026, prior 53.9
• U.S. ISM Manufacturing PMI for August 2026, prior 55.6
• U.S. Construction Spending for July 2026, prior -0.1%
• U.S. Job Openings & Labor Turnover Survey for July 2026, prior 7.4M
• U.S. ADP National Employment Report for August 2026, prior 44,000
• U.S. Factory Orders for July 2026, prior -0.3%
• U.S. Trade Balance for July 2026, prior -73.3B
• U.S. Weekly Jobless Claims for August 29, 2026, prior 203K
• U.S. Services PMI for August 2026, prior 54.6
• U.S. ISM Services PMI for August 2026, prior 54.1
• U.S. Employment Report for August 2026, prior –23K
• U.S. Unemployment Rate for August 2026, prior 4.1%
• U.S. Average Hourly Earnings, M/M% for August 2026, prior 0.1%
• U.S. Average Hourly Earnings, Y/Y% for August 2026, prior 3.1%

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