Markets spent August climbing the proverbial wall of worry. Despite a hawkish turn from the Federal Reserve (the Fed), unflinching gasoline prices and further conflict in the Strait of Hormuz, S&P 500 and Nasdaq each posted a gain for the month after losing ground in July and June.[3] The S&P 500 rose 2.6% in August, bringing its gain to 12.3% so far this year.[4],[5]
Source: https://www.bloomberg.com/news/articles/2026-08-31/s-p-500-falls-amid-oil-spike-as-middle-east-conflict-intensifies
The S&P 500 reclaimed record territory early in the month, as inflation data reinforced bets that the Fed would refrain from raising interest rates in September.[6] The month ended on an uncertain note, as the U.S. launched its first military action in a month against Iran.[7]
A Banner Earnings Season
A major reason stocks found footing was the second-quarter earnings season, which turned out to be exceptional. With 99% of S&P 500 companies reporting, 87% beat earnings estimates, and the eighth consecutive quarter of double-digit earnings growth.[8]
Fueled by robust Q2 earnings, investors ploughed back into technology stocks in August, buying the dip following July’s rout in semiconductors.[9] Data tracking institutional flows showed that demand for US tech stocks surged to a five-year high.[10] Earnings strength in the face of geopolitical and economic noise seems to have reinforced the view that the AI trade is structural rather than cyclical.[11] A broadening of earnings growth to the wider economy also lent support.[12]
The Long End Gets the Spotlight
The bond market further set the stage for an eventful month. The 30-year Treasury yield hit 5.34% mid-August, its highest level since 2007 before the global financial crisis.[13] The same week, the Treasury Department announced that outstanding public debt had reached $40 trillion for the first time.[14]
Source: https://www.bloomberg.com/news/articles/2026-08-17/us-bond-selloff-drives-30-year-yields-to-the-highest-since-2007
Why does this matter for households? The 10-year Treasury yield has a heavy hand in steering consumer borrowing rates.[15] Since the outbreak of the Iran war, the 10-year yield has risen by nearly 70 basis points (0.70 percentage points), pushing 30-year mortgage rates up to around 6.75%.[16] Per Freddie Mac, the 30-year fixed mortgage averaged 6.66% as of August 27, up from 6.56% a year earlier.[17]
In an unusual move, Treasury Secretary Scott Bessent intervened by increasing buybacks of older long-term debt.[18] Yields fell sharply (bond prices rose) on the announcement, but the relief proved brief – by the next day, 10- and 30-year yields rebounded (bond prices fell) and wiped out the decline, as such interventions do not address the underlying structural challenges.[19]
By month’s end, the 10-year yield stood near 4.75%.[20] The silver lining for savers: by some estimates, more than 80% of the global bond universe now yields above 4%.[21] After a long stretch where bonds previously paid very little, the vast majority of bonds now offer meaningful income.
A Firmer Tone at the Fed
At the Fed’s annual Jackson Hole symposium on August 28, Fed Chairman Kevin Warsh was back in the spotlight. He said policymakers must be confident that underlying inflation is moving to the 2% objective “clearly and at sufficient speed,” and that this summer’s better-than-expected inflation readings do not tell him that underlying trends have meaningfully improved.[22]
Markets took this as opening the door to a rate increase. [23] The two-year yield ended the month at 4.34%, up significantly from about 3.50% at the beginning of 2026.[24] A Fed rate hike could further push up the cost of borrowing. The government’s next inflation report, released just days before the Fed’s mid-September meeting, could play an outsize role in determining whether the central bank acts.[25]
What's Next
September’s calendar is a busy one with fresh jobs and inflation data, as well the Fed’s meeting in mid-September.[26] As of the publication of this newsletter, the Federal Reserve raised interest rates for the first time in three years in an effort to combat inflation. [27] Analysts currently expect third-quarter earnings growth of 28.5%, and estimate revisions have been moving up rather than down – unusual heading into the fall. Beyond the data, the wildcards remain: the U.S. war with Iran, re-escalating trade disputes with Canada, the approaching November midterms.[28]
Markets never stop evolving, and staying grounded in a long-term plan keeps investors from chasing headlines. As the summer ends but the tropical heat rolls on, we’re here to help you stay cool-headed with your finances. If you’ve had any life or financial changes, or would like to review your strategy, we encourage you to keep us in the know. Now is a great time to begin thinking about year-end planning as we head into fall.
Your Friends at JSF
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The information expressed herein are those of JSF Financial, LLC, it does not necessarily reflect the views of NewEdge Securities, LLC. Neither JSF Financial LLC nor NewEdge Securities, LLC gives tax or legal advice. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed constitutes a solicitation or recommendation for the purchase, sale or holding of any security. Investing involves risk, including possible loss of principal. Indexes are unmanaged and cannot be invested in directly.
Historical data shown represents past performance and does not guarantee comparable future results. The information and statistical data contained herein were obtained from sources believed to be reliable but in no way are guaranteed by JSF Financial, LLC or NewEdge Securities, LLC as to accuracy or completeness. The information provided is not intended to be a complete analysis of every material fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy. Diversification does not ensure a profit or guarantee against loss. Carefully consider the investment objectives, risks, charges and expenses of the trades referenced in this material before investing. Asset Allocation and Diversification do not guarantee a profit or protect against a loss.
The Bloomberg Barclays U.S. Aggregate Bond Index measures the investment-grade U.S. dollar-denominated, fixed-rate taxable bond market and includes Treasury securities, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities.
The S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market.
TLT-iShares 20 Plus Year Treasury Bond ETF seeks to track the investment results of an index composed of US Treasury bonds with remaining maturities greater than twenty years.
The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX). Because it is derived from the prices of SPX index options with near-term expiration dates, it generates a 30-day forward projection of volatility. Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and in particular the degree of fear among market participants.
The Nasdaq Composite is a market-capitalization-weighted index consisting of all Nasdaq Stock Exchange listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds or debenture securities.
Treasury Bond- is a U.S. government debt security with a fixed interest rate and maturity between two and 10 years.
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP is the most commonly used measure of economic activity.
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[1] https://www.local10.com/business/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[2] https://www.bloomberg.com/news/articles/2026-08-31/s-p-500-falls-amid-oil-spike-as-middle-east-conflict-intensifies
[3] https://www.local10.com/business/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[4] https://www.local10.com/business/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[5] https://www.bloomberg.com/news/articles/2026-08-31/s-p-500-falls-amid-oil-spike-as-middle-east-conflict-intensifies
[6] https://finance.yahoo.com/markets/live/stock-market-today-thursday-august-13-sp-500-record-high-nasdaq-dow-inflation-100145282.html
[7] https://www.local10.com/business/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[8] https://www.factset.com/earningsinsight
[9] https://www.ft.com/content/d4897d94-0d69-445a-9466-5150840c801e?syn-25a6b1a6=1
[10] https://www.ft.com/content/d4897d94-0d69-445a-9466-5150840c801e?syn-25a6b1a6=1
[11] https://www.ft.com/content/d4897d94-0d69-445a-9466-5150840c801e?syn-25a6b1a6=1
[12] https://www.ft.com/content/d4897d94-0d69-445a-9466-5150840c801e?syn-25a6b1a6=1
[13] https://www.cnn.com/2026/08/21/economy/bond-market-explainer
[14] https://www.nbcnews.com/business/economy/bonds-bessent-treasury-debt-repurchase-rcna593319
[15] https://www.nbcnews.com/business/economy/bonds-bessent-treasury-debt-repurchase-rcna593319
[16] https://www.cnbc.com/2026/08/19/bessent-treasury-buybacks-yields-warsh-fed.html
[17] https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-hold-steady-9/
[18] https://www.cnbc.com/2026/08/19/treasury-announces-upscaled-buyback-operation-for-longer-term-debt-sending-yields-lower.html
[19] https://www.cnbc.com/2026/08/20/bond-yields-edge-higher-as-traders-digest-treasury-debt-buyback-plan.html
[20] https://www.local10.com/business/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[21] https://www.blackrock.com/gls-download/literature/whitepaper/bii-investment-perspectives-income-restored-august-2026.pdf
[22] https://www.cnbc.com/2026/08/28/kevin-warsh-jackson-hole-federal-reserve-inflation.html
[23] https://www.cnbc.com/2026/08/28/kevin-warsh-jackson-hole-federal-reserve-inflation.html
[24] https://abc7.com/post/world-shares-are-mixed-oil-prices-surge-us-strike-iranian-rocket-launchers/19769160/ws/2026/08/31/oil-prices-rise-and-stocks-fall-after-us-hits-iranian-sites-in-the-strait-of-hormuz/
[25] https://www.pbs.org/newshour/economy/warsh-raises-stakes-for-feds-next-meeting-and-other-takeaways-from-jackson-hole-conference
[26] https://www.pbs.org/newshour/economy/warsh-raises-stakes-for-feds-next-meeting-and-other-takeaways-from-jackson-hole-conference
[27] https://www.factset.com/earningsinsight
[28] https://www.cnbc.com/2026/09/16/fed-rate-decision-september-2026.html
