Daily Market Snapshot: August 26, 2026

Brought to you by your local Edward Jones financial advisors. Wednesday 8/26/2026 a.m. Markets are modestly higher – U.S. equity markets were modestly higher on Wednesday, with the S&P 500 outpacing the tech-heavy Nasdaq. This comes as oil prices fell toward the lows of the week, with WTI crude oil down by around 1.5% to $81. Meanwhile, Treasury yields moved higher, as the headline PCE inflation metric ticked higher in July to 3.7% year-over-year. Core PCE inflation, the Fed's preferred inflation gauge, came in at 3.3%, in line with forecasts but still well above the 2.0% target. Treasury yields moved higher across the curve, with the 10-year yield up by about 0.03% to 4.66%. In our view, the 10-year yield is likely to remain in the 4.5% to 5.0% range for the remainder of the year, although a rapid move to the higher end of this range could weigh on stock market sentiment. Nonetheless, equity markets have been supported by strong earnings growth and resilient personal consumption, which was revised higher in the second-quarter GDP estimate. Personal consumption expenditure (PCE) inflation in line with estimates – Headline PCE inflation for the month of July was up 3.7% year-over-year, a tick higher than the 3.6% forecast and flat from last month's reading. Core PCE inflation, which excludes volatile food and energy, came in at 3.3%, in line with forecasts and last month's reading. Core PCE inflation is often considered the Fed's preferred inflation metric, and this remains well above the 2.0% target. Goods inflation decreased by 0.1% in today's reading, driven by a drop in gasoline and energy-related goods, as well as a decline in household equipment. Services inflation, however, rose by 0.3% for the month, as pricing in areas like financial services and insurance, as well as housing, moved higher. In our view, the stickier core inflation likely adds to the case for a rate hike by the Federal Reserve. However, we expect that upcoming consumer price index (CPI) inflation as well as labor market data will be critical inputs ahead of the next September 16 FOMC meeting. Positioning portfolios in a higher-rate environment – We expect uncertainty about inflation, fiscal concerns in the U.S., increased bond issuance, and broadly resilient economic activity to keep interest rates higher for a while longer, though largely within a range of 4.5% to 5.0% for the 10-year Treasury over the remainder of the year. While this may limit the potential for meaningful price appreciation in bonds, we think higher yields have helped improve the longer-term appeal of investment-grade bonds and help reinforce their role as a strategic allocation in a well-diversified portfolio. Nonetheless, we believe the outlook over the next 12 months favors equities over fixed-income, particularly given the support from strong profit growth and healthy economic activity. Within equity markets, we acknowledge the potential for a period of near-term consolidation after what's been a solid move higher in 2026. August and September have historically been seasonally weaker months for stocks, and uncertainty could increase as the midterm elections approach, but periods of weakness may provide opportunities to add to equites, in line with your investment goals and risk tolerance. We specifically favor U.S. large- and mid-cap stocks, which we believe offer an attractive combination of quality, exposure to artificial intelligence, and sensitivity to continued economic resilience. We also favor emerging-market stocks, which we believe provide international exposure to strong profit growth tied to the AI buildout, while trading below their 10-year average forward price-to-earnings multiple. Important information: This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice. Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal. Past performance does not guarantee future results. Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment. 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