Market Update August 24
By Twickenham Advisors on September 29, 2026
Sources: Twickenham Advisors, Morningstar Direct, Federal Reserve Bank of New York, Federal Reserve Bank of St. Louis, U.S. Department of Treasury, and Ycharts as of August 24, 2026
Most broad equity indices pulled back last week, with the S&P 500 declining -1.4%. Eight of eleven sectors declined in value, with Health Care, Energy, and Materials stocks being the exceptions, rising 4.3%, 2.9%, and 2.3%, respectively. Economic data and headlines continue to paint a picture of a resilient economy with lingering areas of concern at the margin.
The Commerce Department released a report last week indicating that housing starts fell -12.4% in July, sharply below the consensus estimate for a -6.1% decline. Home builders’ sentiment remains weak as high mortgage rates, rising construction costs and economic uncertainty keep affordability concerns top of mind among potential home buyers. Quarterly earnings results reported last week from retail companies such as Walmart and Home Depot paint a cautious picture of consumer spending. The labor market remains stable in a “low hire / low fire” mode. The Atlanta Federal Reserve’s GDP tracking estimate is forecasting quarterly GDP growth of 4%, still comfortably positive. The demand driven by AI capital expenditure has contributed to continued growth in industrial production in July. The Philadelphia Federal Reserve’s manufacturing index (a measurement of regional factory-sector health in Delaware, southern New Jersey, and eastern/central Pennsylvania that serves as an early indicator for broader U.S. manufacturing) rose sharply in July to a 5-year high.
The national debt made headlines last week, crossing the $40 trillion mark. The budget deficit is the difference between taxes collected and federal spending. Taxes have largely stayed in their historical average of 17-18%, but spending has been a full 3% over its historical average. Without spending restraint and higher economic growth, the deficit is likely to remain elevated. A full treatment of the subject is beyond the scope of this brief overview, but the U.S. Treasury announced increased buybacks of long-dated Treasury bonds last week. This was an attempt to marginally reduce long-term interest rates. The federal government made its largest monthly interest payment last week of $85 billion. Annual interest spending on the national debt has reached $1 trillion. This intervention by the U.S. Treasury unsettled investors and its impact faded quickly as yields rose by the end of the week, retracing almost all of the drawdown stemming from the announcement.
Financial headlines in the week ahead are likely to focus on Nvidia’s quarterly earnings announcement on Wednesday after the market close, and the Fed Chair Kevin Warsh delivering his keynote speech on Friday at the Federal Reserve’s annual economic policy symposium in Jackson Hole, Wyoming.
As we always remind our clients, a well-diversified portfolio is the key to compounding wealth over the long term: stay invested and stay diversified!
