Stock & Bond Markets Today

Friday 8/14/2026 p.m.

Stocks close slightly lower, with U.S. household spending in focus – North American equity markets closed slightly lower on Friday following softer-than-expected U.S. economic data. U.S. headline retail sales fell 0.6% in July, compared with expectations for a 0.1% gain. Meanwhile, the preliminary University of Michigan Consumer Sentiment Index declined to 51.0 in August from 55.2 in July, remaining well below its longer-term average of around 84. Despite Friday’s decline, the TSX and S&P 500 each finished modestly higher for the week. Bond yields also moved higher, particularly at the long end of the curve. The 10-year GoC yield climbed to just below 3.7%, while the 10-year U.S. Treasury yield rose to approximately 4.69%. The rise in longer-term yields despite softer economic data may reflect several factors, including ongoing uncertainty surrounding developments in the Middle East and a modest increase in U.S. consumers’ year-ahead inflation expectations. The University of Michigan survey showed that year-ahead inflation expectations edged up to 4.3% in August from 4.2% in July, while five- to 10-year expectations held steady at 3.3%.
U.S. consumer spending softens in July – U.S. headline retail sales fell 0.6% in July, missing expectations for a 0.1% gain and posting their first monthly decline since January. Despite the monthly pullback, sales remained 5.0% higher compared to this time last year. Looking beneath the headline, declines at motor vehicle and parts dealers and gasoline stations weighed on July sales. However, weakness extended beyond these categories, as retail sales excluding motor vehicles, parts, and gasoline also declined 0.2% for the month. A 2.2% decline in sales at nonstore retailers, a category that includes online shopping, contributed to the broader weakness. However, the drop may partly reflect a timing distortion, as Amazon moved Prime Day from its traditional July window to June 23–26 this year, potentially pulling some purchases forward into June. In our view, elevated tax refunds stemming from legislation enacted in 2025 likely supported U.S. consumers during the first half of the year. Combined with relatively stable labour-market conditions and a low pace of layoffs, this support likely helped offset the pressure that higher energy prices placed on household finances. With the boost from tax refunds likely behind us, a more moderate pace of spending appears reasonable to us over the second half of the year. Nevertheless, we expect U.S. consumer spending to remain stable through year-end, supported by healthy household balance sheets and low unemployment.
Contained U.S. inflation supports a Fed pause in September – Markets breathed a sigh of relief this week as July’s consumer price index (CPI) and producer price index (PPI) inflation reports came in largely in line with, or below, expectations. On the consumer side, headline CPI rose a modest 0.1% for the month and eased to 3.4% on a year-over-year basis. Core CPI increased 0.2% in July and 2.5% from a year earlier. Over the three months through July, core CPI rose at a 1.6% annualized rate, marking the first three-month reading below the Fed’s 2% inflation target this year. The producer price report provided further evidence of moderating price pressures. Headline PPI was unchanged in July, while PPI excluding food and energy rose 0.2%, below expectations. Before last week's payroll report, markets had priced in roughly a 60% probability of a 0.25-percentage-point rate increase at the Fed’s September meeting. Following this week’s inflation data, futures markets are now tilted toward a pause, with the probability of a rate increase falling to approximately 30%. Barring an upside surprise in the August inflation data or renewed energy-price pressures, we believe the recent string of moderate inflation readings support the Fed holding rates steady in September.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

U.S. stocks continue to set record highs – U.S. and Canadian equity markets moved higher on Thursday, with the S&P 500 hitting a new record high. This comes as both U.S. consumer price index (CPI) and producer price index (PPI) inflation data for July came in somewhat cooler than expected. As a result, expectations for a Federal Reserve interest rate hike in September have moved lower. According to CME FedWatch, the probability of the Fed raising rates at the September 16 FOMC meeting has fallen to about 34%, from around 55% last week. Government bond yields in the U.S. and Canada are also moving lower, supportive of equity markets as well. The U.S. 2-year Treasury yield, which tends to be most sensitive to Fed rate expectations, moved lower by about 0.05%, from 4.2% to 4.15%. Overall, for the full year, the S&P 500 is now up about 14%, while the Canadian TSX is up by about 15%. In our view, a combination of strong earnings growth and stable labour-market and consumption trends continues to underpin stock market gains.
U.S. producer price index (PPI) inflation eases in July, in line with expectations – Headline PPI inflation rose 4.7% year-over-year in July, below expectations of 4.9% and well below last month's 5.5% reading. Core PPI inflation, excluding food and energy, was up 4.2%, slightly above forecasts of 4.1%, but still below last month's 4.7%. Overall, easing inflation on producer prices indicates that production and materials costs are more contained and could mean better final prices for consumers. Markets have welcomed this week the combination of better-than-expected CPI inflation and PPI inflation for the month of July. Nonetheless, inflation remains elevated versus the Fed's 2.0% core inflation target. While inflation does not seem to be reaccelerating, which is a step in the right direction, investors will be monitoring one more set of inflation data in September, which we believe will be critical ahead of the September FOMC meeting.
Investing at all-time highs can be fruitful – Reaching an all-time high can leave investors wondering whether it is still a good time to put money to work. While pullbacks can occur at any time, history suggests that new highs have not typically been poor entry points.* Average forward three-month returns have been slightly lower when investing at an all-time high, but the gap largely disappears over six months.* Over one-, three-, and five-year horizons, average returns have actually been higher following all-time highs than when investing on a typical trading day.* In our view, the lesson is that new highs often occur because fundamentals are improving, not because a market advance is ending. As a result, time in the market has historically mattered more than waiting for a perfect entry point. Read more in this week's Weekly Market Wrap: https://www.edwardjones.ca/ca-en/market-news-insights/stock-market-news/stock-market-weekly-update

Mona Mahajan;
Investment Strategy

^{Source for all data not cited: FactSet.}
^{Source for data cited: *FactSet, Edward Jones}

Stocks rise with U.S. inflation in focus – North American equity markets traded higher on Wednesday following the release of U.S. Consumer Price Index (CPI) data for July. Headline CPI rose 3.4% year-over-year, while core CPI increased 2.5%, with both measures matching consensus expectations. From a leadership perspective, the TSX and Nasdaq outperformed, gaining 0.6% and 0.5%, respectively, while the S&P 500 also posted a modest gain. Bond yields closed little changed following the in-line inflation reading, with the 10-year U.S. Treasury yield ending the session at approximately 4.69% while the 10-year GoC yield fell to 3.68%. In commodity markets, oil prices were little changed as investors continued to await greater clarity on the outlook for the Strait of Hormuz.
U.S. inflation eases in July, matching expectations – U.S. headline CPI rose 0.1% in July and 3.4% from a year earlier, matching consensus expectations. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.5% year-over-year, also in line with expectations. Encouragingly, the July reading brought the three-month annualized rate of core CPI down to 1.6%, the first reading below the Fed's 2% inflation target since December 2025. Looking at the underlying drivers, shelter inflation, which accounts for more than one-third of the CPI basket, rose a modest 0.1% for the second consecutive month. Additionally, sluggish U.S. home-price growth in recent months suggests the potential for further moderation in shelter inflation over the coming months. On the other hand, core goods prices posted their largest monthly increase since September of last year, as upward pressure on used vehicle and consumer electronics prices filtered through, with the latter perhaps reflecting recent price increases announced by Apple. Overall, we believe today's report suggests that higher oil prices have not created broad-based inflationary pressures across core categories. Combined with a contraction in payrolls in July, the data could help support a patient approach from the Federal Reserve with respect to future monetary-policy actions. That said, the August inflation report will likely play a key role in shaping expectations ahead of the September policy meeting.
Consumer check-in ahead – In addition to another key inflation reading, this week will also provide a look into recent U.S. consumer-spending trends, with July retail sales scheduled for release on Friday. Expectations are for the headline figure to rise 0.1% month-over-month, while control-group retail sales, which exclude categories such as motor vehicle and parts dealers, gasoline stations, building materials, and restaurants and bars, are expected to increase 0.4%. More recently, evidence has pointed to solid consumer-spending trends. Control-group retail sales grew at a three-month annualized rate of 8.0% through June, while real personal consumption expenditures increased at a 3.2% annualized rate in the second quarter. That marked the strongest pace of growth in a year and highlighted the resilience of household spending despite higher oil prices. We expect U.S. consumer-spending trends to remain healthy in the coming months, supported by steady labour-market conditions despite slowing job growth, and generally healthy household balance sheets.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Markets close mixed ahead of this week's inflation reports – The TSX reached a new record closing high, while U.S. equity markets ended lower on Tuesday as investors look ahead to tomorrow's U.S. Consumer Price Index (CPI) report. Bond yields also declined, with the 10-year Government of Canada yield at 3.71% and the 10-year U.S. Treasury yield near 4.69%. International markets were mixed across Asia and Europe. In energy markets, WTI oil prices rebounded near $83 per barrel as markets weighed diplomatic efforts to ease disruptions in the Strait of Hormuz. The U.S. dollar was little changed against major currencies.
Market focus shifts to inflation –July's U.S. CPI report will be released Wednesday, with forecasts calling for headline inflation to ease to 3.4% year-over-year, from 3.5% in June. Core CPI, which excludes the more volatile food and energy components, is forecast to cool to 2.5%, down from 2.6%. The July Producer Price Index (PPI) report, due Thursday, is expected to show a more pronounced slowdown in wholesale inflation, although from a higher starting point. A broadly in-line or softer set of readings should help reinforce the view that inflationary pressures are gradually moderating and could give the Fed greater flexibility in setting monetary policy. Conversely, an upside surprise, particularly in core inflation, could challenge that narrative and put upward pressure on bond yields.
Employment data points to slower job growth – U.S. private employers added an average of 8,250 jobs per week for the four weeks ending July 25, down from 11,000 in the previous report, according to ADP. The figures are consistent with other indicators pointing to moderation in hiring. Even at this slower pace, job gains may be sufficient to support near-full employment, particularly as labour-force growth also slows. The broader labour market therefore appears to be cooling but still roughly balanced, in our view. Approximately 7.4 million job openings continue to exceed the 6.9 million unemployed workers, suggesting labour demand remains relatively healthy. This should help support household incomes and consumer spending, key pillars of the broader economy. At the same time, slower hiring should help reduce wage-related inflation pressures, potentially giving the Fed more room to be patient. The timing of any move will likely depend on incoming inflation and employment data over the months ahead. We also expect the Bank of Canada to remain on hold a while longer.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Stocks mixed as oil prices jump – U.S. markets took a breather today while the TSX hit a fresh record high. With earnings season largely behind us, investors' attention has shifted to geopolitics. Efforts to secure a deal to reopen the Strait of Hormuz remain stalled, while Houthi militants claimed responsibility for an attack on a Saudi refinery near the Red Sea, lifting oil prices by more than 4% and pushing WTI crude above $80 per barrel. Meanwhile, the U.S. administration appears to be pivoting toward economic pressure rather than additional military strikes. Within the market, energy led sector performance, supported by higher oil prices, while more defensive and interest rate-sensitive sectors, including real estate, utilities, and communication services, underperformed. Elsewhere, Taiwan Semiconductor Manufacturing (TSMC), the world's largest chipmaker, reported strong July revenue growth of 44.7% year-over-year, helping reinforce continued demand for AI-related technology. However, shares of NVIDIA fell on reports that it is partnering with Wall Street firms on $500 billion in funding for the buildout of AI infrastructure.
Attention turns from earnings to inflation - Corporate earnings have been front and center for markets over the past several weeks. With roughly 90% of S&P 500 companies having reported second-quarter results, earnings growth is tracking near 48%, more than double the 24% estimate at the start of earnings season and one of the strongest reporting periods outside of major post-recession rebounds. This earnings strength has been a key pillar supporting equities and helping drive major indexes to record highs. This week, however, investors’ focus is likely to shift from earnings to economic data, particularly inflation reports, as uncertainty remains around the Federal Reserve’s next move. Friday’s weaker-than-expected jobs report reduced expectations for a September rate hike, with markets now pricing in less than a 50% probability. Even so, this week’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports are expected to play a larger role in shaping the outlook for monetary policy. Consensus forecasts call for headline CPI inflation to ease slightly to 3.4% in July from 3.5% in June, while core inflation is expected to slow to 2.5% from 2.6%, which would mark its lowest level since February. While uncertainty surrounding the path of monetary policy remains elevated, we continue to believe that additional rate hikes are far from inevitable, particularly if inflation continues to show gradual signs of moderation.
Is buying at all-time highs a risky proposition? - Reaching an all-time high can leave investors wondering whether it is still a good time to put money to work. While pullbacks can occur at any time, history suggests that new highs have not typically been poor entry points.* Average forward three-month returns have been slightly lower when investing at an all-time high, but the gap largely disappears over six months.* Over one-, three-, and five-year horizons, average returns have actually been higher following all-time highs than when investing on a typical trading day.* In our view, the lesson is that new highs often occur because fundamentals are improving, not because a market advance is ending. As a result, time in the market has historically mattered more than waiting for a perfect entry point. In today's environment, we believe investors should avoid becoming overly concentrated in any single theme, keeping in mind their risk tolerance and investment goals.

Angelo Kourkafas, CFA;
Investment Strategy

^{Source for all data not cited: Bloomberg.}
^{Source for data cited: * FactSet, Edward Jones}

Friday 8/7/2026 p.m.

Markets close higher following jobs reports – Canadian and U.S. equity markets ended higher on Friday, with the TSX and S&P 500 reaching record closing highs. The July employment reports showed stronger-than-expected job gains in Canada alongside a lower unemployment rate for both Canada and the U.S. Investors appeared to focus on the U.S. report’s softer wage and hiring trends, which may help reduce inflationary pressure and give the Fed less urgency to hike interest rates. Bond yields were mixed, with the 10-year Government of Canada yield up to 3.64% and the 10-year U.S. Treasury yield down near 4.64%. In international markets, Asia finished mixed overnight, while Europe traded higher. In energy markets, WTI oil prices edged down near $77 per barrel amid reports that Iran and Oman are nearing an agreement that could reduce disruptions in the Strait of Hormuz. The U.S. dollar was weakened modestly against major currencies, consistent with the decline in Treasury yields.
U.S., Canada jobs reports mixed, unemployment edges lower – Canada employment grew by 75,000 in July, ahead of estimates for 18,000 jobs added. As a result, the unemployment rate ticked down to 6.4%, below expectations to hold steady at 6.5%. Total U.S. nonfarm payrolls declined by 23,000 in July, well below forecasts for a gain of 95,000 and the average monthly increase of 34,000 over the past 12 months. The largest contributors to the drop were local government education (-50,000), leisure and hospitality (-40,000) and retail trade (-19,000). Payroll figures for May and June were also revised lower by a combined 103,000, indicating hiring slowed more than previously reported. Despite July's job losses, the unemployment rate edged down to 4.1%, compared with expectations that it would hold steady at 4.2%, driven by a further reduction in the labour-force participation rate. Average hourly earnings increased 3.2% from a year earlier, below estimates calling for a 3.5% rise, which could help ease inflationary pressure. The broader labour market appears to be cooling but still roughly balanced, in our view. Approximately 7.4 million job openings continue to exceed the 6.9 million unemployed workers, which should help support household incomes, consumer spending and the broader economy. The report could keep the Fed on track to hike; however, there may be somewhat less urgency now, in our view, with the timing likely dependent on incoming inflation and employment data over the months ahead.
Strong earnings season approaches the home stretch – With 88% of S&P 500 companies having reported earnings, results have been considerably stronger than expected. About 86% have beaten analyst estimates by an average upside surprise of 29%. As a result, forecasts for second-quarter earnings growth have been revised sharply higher to 48%, more than double the 22% estimate at the end of the quarter. Energy companies are posting the strongest growth — supported by higher oil prices during the quarter — followed by the communications and consumer discretionary Earnings gains have also been broad-based, with 10 of the 11 sectors reporting year-over-year increases. We believe wider participation could help make the market's advance more durable by reducing its reliance on a small group of mega-cap companies. It could also help create a more favourable backdrop for diversified portfolios. We continue to recommend overweight positions in U.S. large-cap stocks and emerging-market equities, which we think stand to benefit from their exposure to tech innovation and related infrastructure buildout. We expect U.S. stocks to benefit from the relative strength of the U.S. economy, supported by a steady labour market and consumer spending. We also recommend an overweight position in Canadian small- and mid-cap stocks given their meaningful exposure, in our view, to materials, industrials and energy, three sectors we view favourably.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}

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The Investment Policy Committee (IPC) defines and upholds Edward Jones investment philosophy, which is grounded in the principles of quality, diversification and a long-term focus.

The IPC meets regularly to talk about the markets, the economy and the current environment, propose new policies and review existing guidance — all with your financial needs at the center.

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