STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 8/13/26 (a/o 1:15 pm)
DOW 53,748 (-22), S&P 500 7,794 (+45), Russell 2000 3,052 (+6), NYSE FANG+ 18,792 (+317), ICE Brent Crude $87.67/barrel (-$1.31), Gold $4,420/oz (-$48), Bitcoin ~63.1k (-290)
MAC Desk Commentary:
Yesterday the highly anticipated CPI report turned out to be a non-event, inline on both headline and core, which led to another uneventful trading day as we hit the middle of August. This week continues to be a consolidation of last week’s strong gains.  The S&P rose 0.3% yesterday, the equal-weight slightly less and the Russell outperformed, doubling up the S&P. The AI data center ecosystem was a winner yesterday following results from CoreWeave and Nebius, along with Lumentum (optical networking) and SMCI. A notable exception were the hyperscalers, which were all down except ORCL. Real Estate and Tech led the sectors, while Discretionary, Materials and Comm Services lagged. Treasury yields were flat to slightly lower on the CPI print and expectations for the Fed to remain on hold in September rose modestly.  

This morning the PPI took its turn as the latest read on inflation. Equity futures were a touch higher of the print while yields were lower by ~3bps. The report was a bit cooler than expected adding to the bid in Treasuries and equity futures. The equity strength continued through the first hour of trade. The S&P 500 broke above 7,800 before starting to drift lower, giving up about half of the gains though we have firmed up again. Shortly before equities topped out oil prices began to reverse the overnight losses on reports that an Aramco refinery was targeted by drones. ICE Brent is down ~1.5% but is about $2 off the lows. Tech is outperforming with the NYSE 100 index up ~1%.  Today has been the most exciting day this week (though the bar is low) as we are seeing the strongest gains, it is my daughter’s birthday and the two-month anniversary of the Knicks Championship. As we head to print, the S&P 500 is up 45pts to 7,794 (+0.6%), the Dow is down 36pts to 53,734 (-0.1%), while the Russell 2k is up 6pts to 3,052 (+0.2%).
Headline PPI was flat month-over-month, below consensus of 0.2% and up from last month’s -0.1% reading (revised up from -0.3%). Core was up 0.2%, a tick below the 0.3% consensus and down from 0.4% last month (revised from 0.2%). Final Demand Goods ex-Food & Energy rose 0.1%, down from 0.2% last month.  Final Demand Services rose 0.2%, down from 0.5%. The volatile Trade services (retail margins) fell 0.1%. The prior 3 readings saw it ping-pong: 1.5%, -3.1%, and 1.4% last month. Transportation and Warehousing pricing continued to ease after a run of strong increases in the first 5 months of the year.  Excluding Trade, Transportation and Warehousing, Services rose 0.6%. That’s notable given container shipping giant Maersk’s comments this morning during its earnings call. The CEO said bottlenecks in land transportation are getting worse, increasing congestion and pushing freight rates higher. Initial claims moved up to 209k but continuing claims remained under 1.8ml for the fifth consecutive week.  
Treasury yields started to tick up off the lows along with oil. This afternoon’s 30yr auction was weak with price tailing 4bps from the when issued market. The underlying metrics were about in line with recent averages. 2-10yr yields are down ~6bps while the 30yr is down ~4bps ticking up a bit after the auction.  Fed expectations continue to evolve in a less hawkish way with the odds of a hike in September down to ~35%, while the odds of at least one hike by the end of the year are down to ~65% from 85% a week ago.

  • US 2yr -6bps to 4.15%, 5yr -6bps to 4.32%, 10yr -6bps to 4.65%, 30yr -4bps to 5.22%
  • USD index: -$0.04 to $99.86
Most S&P 500 sectors are trading on either side of unchanged. Info tech is leading to the upside despite the companies that reported last night all trading lower (CSCO, COHR, CBRS). That dynamic is once again more about expectations as opposed to the strength of the numbers. Memory stocks are back in rally mode (DRAM+5%) after Sandisk (+>15%) provided updated guidance at its Investor Day expecting revenue to grow mid to high teen’s from 2028-30 while maintaining margins ~80%. Hardware stocks are trading higher after the strong Lenovo results last night and the heels of SMCI yesterday. Software stocks are pulling back again after the recent rally. Comm Services is also up ~1% with broad based strength in the sector. Netflix is a standout up ~4% after Pershing Square disclosed a new position along with 5 other stocks including our parent company, S&P Global, payments processors Mastercard and Visa and Alcon. REITs are also up ~1% helped by the pullback in yields. Staples are also outperforming modestly with strength in food/beverage companies.

Materials is the only sector with meaningful losses with miners and ag chemical companies under pressure. Within industrials airlines, building products and ground transportation stocks are outperforming while machinery and defense stocks underperform. In consumer discretionary travel and housing related are outperforming while there is weakness in apparel after Tapestry results. 
Overnight the Hang Seng was slightly lower, weighed down by Tencent’s -4% decline after reporting earnings. It became the latest consumer-facing tech company to ramp up capex investment for AI, which rose 176% in the quarter to ~$8B. It’s expected to rise further in 2H, and the company has the option to rent out the infrastructure to recover costs if necessary. JD.com reported this morning and the ADR’s are off >5% despite beating on both the top/bottom lines. Lenovo traded sharply higher overnight after its earnings.  Shanghai fell 0.5%. In Japan the Nikkei rose 1% with Tech leading. Local reports have focused on the rapid expansion of margin trading in the country, which accounted for 83% of all retail volume in July and sounding similar to the dynamics in South Korea (until regulators moved to cut that activity recently). Speaking of retail, Japanese brokerages are planning to offer day-time trading of US listed stocks as early as December, in conjunction with the upcoming launch of 23-hour trading in the US. A rate hike in September or October is gaining traction according to reports, which could further support the yen after the recent big FX interventions.  South Korea’s KOSPI rose 3.5% with the memory twins Samsung and SK Hynix each up about 5%. The index has bounced over 20% from its low, putting it back into a Bull market. European indices ended mixed fading into the close along with US markets. 
 ICE Brent is modestly lower continuing to consolidate in the upper 80’s. Natural gas prices are also modestly lower. The trading action in the metals complex has been interesting. After the recent rally the metals complex was under some pressure overnight despite the move lower in oil, yields and the USD and are near session lows. Gold is down a little more than 1% trading just over 4,400 about $100 off the overnight high. Copper is outperforming bouncing back to around unchanged after being down ~2% earlier. Ag is mostly lower giving back some of the week’s gains. Crypto is pulling back modestly. 
Quickly looking ahead AMAT is the key earnings report after the close. Tomorrow retail sales will be released as we gear up retail earnings starting next week. It is also the deadline for 13f’s.

Earnings:
After-Market: AMAT, GEMI, GSAT, GLOB, MFP, ROST, YSS

Economic Data:
US:
  • PPI m.m: 0.0% vs 0.2% cons, prior -0.1%
  • Core PPI: 0.2% vs 0.3% cons, prior 0.4%, revised from 0.2%
  • Initial Claims: 209K vs 202K vs 200K
  • Continuing claims: 1777K vs 1800K cons, prior 1800K
Global:

  • UK June GDP m.m: 0.3% vs 0.0% cons, prior 0.0%
  • Q2 GDP: 0.4% vs 0.4% cons, prior 0.6%
  • Norway rate decision: Hold as expected
  • EU Industrial Production: 0.0% vs -0.1% cons, prior 0.3%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 8/13/26 (a/o 9:00 am)
Good morning,
 
Yesterday the highly anticipated CPI report turned out to be a non-event, inline on both headline and core, which led to another uneventful trading day as we hit the middle of August. This week continues to be a consolidation of last week’s strong gains.  The S&P rose 0.3% yesterday, the equal-weight slightly less and the Russell outperformed, doubling up the S&P. The AI data center ecosystem was a winner yesterday following results from CoreWeave and Nebius, along with Lumentum (optical networking) and SMCI. A notable exception were the hyperscalers, which were all down except ORCL. Real Estate and Tech led the sectors, while Discretionary, Materials and Comm Services lagged. Treasury yields were flat to slightly lower on the CPI print and expectations for the Fed to remain on hold in September rose modestly.  
 
This morning the PPI took its turn as the latest read on inflation. Equity futures were flat ahead of the print and yields were ~3bp lower. The report was slightly less on the screws than the CPI, a bit cooler than expected. Futures moved modestly higher, at their highs. While AI infrastructure names were strong yesterday, Cisco, Cerebras (concerns of competing against the mega chip makers) and Coherent (giving back yesterday’s optical rally) are trading lower in the pre-market despite strong results on the surface. HPQ and DELL are higher on Lenovo’s earnings report overnight. Tapestry is down as well on earnings, which look inline-ish. The FT reported that investors expect Anthropic to IPO at a $2 trillion valuation in October.
 

 
Headline CPI was flat month-over-month, below consensus of 0.2% and up from last month’s -0.1% reading (revised up from -0.3%). Core was up 0.2%, a tick below the 0.3% consensus and down from 0.4% last month (revised from 0.2%). Final Demand Goods ex-Food & Energy rose 0.1%, down from 0.2% last month.  Final Demand Services rose 0.2%, down from 0.5%. The volatile Trade services (retail margins) fell 0.1%. The prior 3 readings saw it ping-pong: 1.5%, -3.1%, and 1.4% last month. Transportation and Warehousing pricing continued to ease after a run of strong increases in the first 5 months of the year.  Excluding Trade, Transportation and Warehousing, Services rose 0.6%. That’s notable given container shipping giant Maersk’s comments this morning during its earnings call. The CEO said bottlenecks in land transportation are getting worse, increasing congestion and pushing freight rates higher.
 
Yields fell about 3bp further after the print as markets price more of a hold into September expectations.
 
  • US 2yr -6bps to 4.15%, 5yr -7bps to 4.32%, 10yr -6bps to 4.64%, 30yr -5bps to 5.21%
  • USD index: -$0.16 to $99.74
Overnight the Hang Seng was slightly lower, weighed down by Tencent’s -4% decline after reporting earnings. It became the latest consumer-facing tech company to ramp up capex investment for AI, which rose 176% in the quarter to ~$8B. It’s expected to rise further in 2H, and the company has the option to rent out the infrastructure to recover costs if necessary. Shanghai fell 0.5%. In Japan the Nikkei rose 1% with Tech leading. Local reports have focused on the rapid expansion of margin trading in the country, which accounted for 83% of all retail volume in July and sounding similar to the dynamics in South Korea (until regulators moved to cut that activity recently). Speaking of retail, Japanese brokerages are planning to offer day-time trading of US listed stocks as early as December, in conjunction with the upcoming launch of 23-hour trading in the US. A rate hike in September or October is gaining traction according to reports, which could further support the yen after the recent big FX interventions.  South Korea’s KOSPI rose 3.5% with the memory twins Samsung and SK Hynix each up about 5%. The index has bounced over 20% from its low, putting it back into a Bull market. European markets are marginally higher though the UK is lower despite June GDP June growing more than expected, as May was revised lower. For Q2 overall, GDP grew 0.4%, matching expectations and down from Q1’s 0.6%.
 

 
Brent crude is down 2% this morning, pulling back from recent highs. Metals are lower as well, with gold down modestly, consolidating its recent run-up. Bitcoin and ETH are up slightly and Ag is mixed.
 

 
Earnings:
After-Market (Wed): AOSL, BTGO, CAE, CBRS, COHR, CSCO, DOX, ENS, EQPT, GO, HLIT, INFQ, JACK, NNE, PAR, REZI, SECZ, SPCE, STAA
Pre-Market: AIT, AUPH, BIRK, BN, DDS, FRMI, JD, LAC, LUNR, PS, SSYS, TPR, WWW, XE, YETI
After-Market: AMAT, GEMI, GSAT, GLOB, MFP, ROST, YSS
 
Economic Data:
US:
  • PPI m.m: 0.0% vs 0.2% cons, prior -0.1%
    • Core PPI: 0.2% vs 0.3% cons, prior 0.4%, revised from 0.2%
  • Initial Claims: 209K vs 202K vs 200K
  • Continuing claims: 1777K vs 1800K cons, prior 1800K
Global:
  • UK June GDP m.m: 0.3% vs 0.0% cons, prior 0.0%
    • Q2 GDP: 0.4% vs 0.4% cons, prior 0.6%
  • Norway rate decision: Hold as expected
  • EU Industrial Production: 0.0% vs -0.1% cons, prior 0.3%

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