Written by Amaury de Barros Conti, Partner | Vice President Investments
WHAT MOVED MARKET LAST WEEK
After three consecutive weeks of gains, U.S. equity markets pulled back as investors contended with another surge in long-term Treasury yields, rising energy prices, and renewed concerns about fiscal deficits. Importantly, we believe the weakness was driven more by valuation pressures from higher interest rates than by deterioration in economic fundamentals. In our view, the primary challenge for markets remains the rapid repricing occurring in long-term bond markets, where investors are demanding higher compensation for inflation, fiscal, and supply-related risks.
The S&P 500 declined 1.4% for the week, while the Nasdaq Composite fell 2.2% and the Russell 2000 lost 1.7%. The Dow Jones Industrial Average declined 0.9%, as per Bloomberg data. Sector performance reflected a rotation toward inflation-sensitive and defensive areas of the market. Health Care was the strongest-performing sector, among headlines of positive developments in cancer treatment research, while Technology, Industrials, and Utilities lagged amid rising yields.
Source: Bloomberg Finance as of August 21, 2026.
- The dominant market story continues to be the rise in long-term interest rates. During the week, the 30-year Treasury yield briefly exceeded 5.3%, its highest level in nearly two decades, while the 10-year Treasury yield approached 4.7%. Unlike prior rate increases principally driven by Federal Reserve tightening, this move appears increasingly associated with fiscal concerns, government borrowing needs, growing Treasury supply, and elevated energy prices.
- The July Federal Reserve minutes reinforced this concern, showing that several policymakers remain willing to tighten policy further if inflation progress stalls. While the Fed left rates unchanged at its July meeting, the tone of the minutes appeared notably hawkish.
- Housing remains the clearest area of weakness. Housing starts fell 12.4% in July, while existing home sales slipped to a 4.06 million annualized pace. Mortgage rates near 6.7%, combined with elevated home prices and higher energy costs, continue to weigh on affordability and construction activity.
- Commodity markets extended their recent advance as geopolitical tensions surrounding Iran and the Strait of Hormuz continued to create uncertainty around global energy supplies. Crude oil gained approximately 5.6% for a second consecutive week, with WTI crude settling above $87 per barrel. Gold rose roughly 5.6%, while silver rallied more than 7%, seeming to benefit from both inflation concerns and safe-haven demand.
LOOKING AHEAD
- This week could be one of the most important of the quarter. Investors will closely watch Nvidia’s earnings report, which many view as a critical barometer for AI infrastructure spending, semiconductor demand, and broader technology sector sentiment. Results will likely have implications not only for technology stocks but for overall market leadership.
- Attention will also focus on the scheduled release of the July PCE inflation report, the Federal Reserve’s preferred inflation measure, and Kevin Warsh’s first keynote address at the Jackson Hole Economic Policy Symposium. Given recent moves in Treasury yields, we expect investors will be particularly interested in any discussion regarding inflation, balance sheet policy, and the rise in long-term rates.
Amaury de Barros Conti
Partner | Vice President Investments
Source: Bloomberg Finance as of August 21, 2026 for the index and sector returns, rates and commodities figures and; U.S. Census Bureau and National Association of Realtors, July 2026 for the housing figures.
General Disclaimer: This material is provided for informational purposes only and should not be construed as investment, legal, or tax advice. Sendero Wealth Management, LLC is an SEC-registered adviser; registration does not imply skill. Views are as of the date noted, may change without notice, and forward-looking statements are not guarantees of future results. References to specific companies are for informational and contextual purposes only and are not recommendations to buy, sell, or hold any security. Data from third-party sources is believed to be reliable but is not guaranteed; indices are unmanaged and not available for direct investment. Past performance is not indicative of future results. All investments involve risk, including possible loss of principal. Consult your professional advisers regarding your specific circumstances. Review our Form ADV & Form CRS here.
