Market Pulse — Thursday, 13 August 2026

Global Cross-Asset Daily

Inflation is slowing, but long-term Treasury yields are still rising. July CPI rose 3.4% from a year earlier, down from 3.5% in June, in line with forecasts. Core CPI eased to 2.5%. The S&P 500 rose 0.27% to 7,748.71 and the Nasdaq rose 0.54%, led by AI computing companies. The 10-year Treasury auction cleared at 4.683%, 10 basis points above last month’s auction, on the same day the government reported a US$432 billion July budget deficit. Brent closed at US$88.98 even though US crude inventories rose 17.4 million barrels. The Russell 2000 closed at its 2026 high.

§ 01 — Equities · United States

The Russell 2000 set its 2026 closing high. The Russell 2000 rose 0.61% to 3,045.48. It now leads the US indices for the year at 22.71%. It set this high while the Federal Reserve is still discussing rate hikes. The S&P 500 rose 0.27% to 7,748.71, below Friday’s record close of 7,757.64. The Nasdaq rose 0.54% to 26,588.49. The Dow fell 0.04% and was the only US index to decline. It is down 1.07% for the week, measured from its 5 August record close. The VIX fell 4.78% to 14.55.

§ 02 — S&P 500 Sector Map

Wednesday 12 Aug · sorted best to worst (1D)

Technology was the best sector on Wednesday. Energy is still the best sector this year. Technology rose 1.49% on the AI earnings. Eight sectors rose and three fell. Materials was the weakest, down 1.24%. Energy rose 0.16% and still leads 2026 at 36.50%, ahead of technology at 31.18%. One strong technology day narrowed the gap from 7.02 points to 5.32 points. For the week, energy leads at 6.49% and real estate is the weakest, down 1.57%. Utilities and real estate, the two most rate-sensitive sectors, both rose as yields eased.

Full table · sorted by YTD

§ 03 — Equities · Global

All figures reference Wednesday 12 August closes computed from FMP end-of-day data. One-day moves compare with the Tuesday 11 August close, one-week moves with the Wednesday 5 August close, and year-to-date with each market’s last 2025 close. Tokyo was closed Tuesday for the Mountain Day holiday, so the Nikkei daily move compares Wednesday with the Monday 10 August close.

The KOSPI jumped 3.68% but is still slightly down for the week. The KOSPI rose 3.68% to 6,579.04, the largest move among the equity markets in this letter. It is still 0.29% below last Wednesday, because last Wednesday was the unusually high 6,598.26 close of 5 August. The Korean market closed before the US CPI was released, so the move was not a reaction to it. The Nikkei reopened after Tuesday’s holiday and rose 0.83% to 67,524.06. The TAIEX rose 0.88% and leads the global table this year at 57.16%, just ahead of the KOSPI at 56.12%. The Hang Seng fell 0.83%. It and Shanghai remain below their end-2025 levels.

§ 04 — US Treasuries

3.5% 4.0% 4.5% 5.0% 6M 2Y 5Y 10Y 20Y 30Y

Treasury yields fell slightly on the day but rose on the week, led by the long-term maturities. On Wednesday, yields fell 1 to 3 basis points out to the 20-year. The 30-year yield was unchanged at 5.24%. Over the week, the 2-year yield rose 2 basis points, the 10-year rose 5 and the 30-year rose 7, while bill yields eased slightly. The 30-year auction takes place today. Short-term yields still rise with maturity, from 3.87% at 3 months to 4.20% at 2 years, so the market is not pricing rate cuts. The spread between the 2-year and the 10-year yield is 48 basis points. July’s 3.4% CPI armed this letter’s 2-year test. The 2-year closed at 4.20%, 8 basis points below the 4.28% line and 10 above the 4.10% line.

§ 05 — Credit Spreads

CCC spreads widened 9 basis points on the second reading taken with Brent near US$89. Tuesday’s data showed CCC and lower spreads at 1,023 basis points, 9 wider on the day. Monday’s first reading with oil at these levels had shown only a 1 basis point move, and this letter concluded then that credit spreads were not reacting to oil. The two sessions total 10 basis points of widening, which is about 1% of the level. High yield widened 2 basis points to 272. This is not a repricing yet. The next reading will show whether it continues.

Credit spreads are FRED ICE BofA option-adjusted spreads (IG BAMLC0A0CM, BBB BAMLC0A4CBBB, HY BAMLH0A0HYM2, CCC & Lower BAMLH0A3HYC) as of the Tuesday 11 August close, the latest observation FRED has published, so this table runs one session behind the rest of this letter. One-day changes reference the Monday 10 August close, one-week changes the Tuesday 4 August close, and year-to-date the last 2025 observation. Widening (positive basis points) reads as stress. Narrowing reads as relief.

§ 06 — Digital Assets

Bitcoin has stayed between US$63,000 and US$65,000 all month. Bitcoin fell 0.20% to US$63,404.99. Every daily close since 4 August has been inside that range. Ether fell 0.19% to US$1,877.24 and Solana fell 0.89% to US$75.54. Russia’s central bank proposed limiting retail investors to bitcoin, ether and one US dollar stablecoin, with purchases capped near US$3,600 a year for each coin. Bitcoin is down 27.54% for the year.

Bitcoin’s equity link reflects the historical daily-return pattern, closest to the Nasdaq at about 0.5 and loosest to the Dow at about 0.4. Crypto trades continuously. Levels shown are FMP end-of-day closes for Wednesday 12 August. Daily moves compare with the Tuesday 11 August close, weekly moves with the Wednesday 5 August close, and year-to-date with the 31 December 2025 close.

§ 07 — Metals & Energy

Brent held its price despite a large inventory build. US crude inventories rose 17.4 million barrels last week against a consensus for a 1.4 million barrel draw. Imports ran 1.8 million barrels a day higher. Brent still closed up 0.08% at US$88.98 and WTI at US$83.27. A confirmed build with Brent above US$87.72 means the market is paying for the risk of moving oil through the strait, not for a shortage of oil. Gold rose 0.59% to US$4,467.50 and is 2.91% above its end-2025 marker of 4,341.10. Natural gas rose 1.34% on hotter weather forecasts.

§ 08 — Economic Calendar

US release times are Eastern. Overseas releases are shown in local-market timing (China activity data lands Sunday night US time). Consensus and priors are FMP-sourced. Thursday carries July producer prices, jobless claims, two Federal Reserve speakers and the thirty-year auction. Retail sales, consumer sentiment and the CFTC futures report follow Friday. China’s July activity data and Canadian inflation open next week.

July PPI is released this morning. Consensus expects producer prices to be rising faster than consumer prices. Jobless claims, two Federal Reserve speakers and the 30-year auction follow the same morning. Friday brings July retail sales, consumer sentiment and the weekly CFTC report on futures positions.

§ 09 — Macro Themes

1 · The CPI report did not settle the rate debate. Bank of America repeated its call for three rate hikes this year. Pimco expects the Fed to hold in September. Energy prices fell within July. Talks to reopen the strait failed on 10 August, so the oil effect appears from the August CPI onwards.

2 · Government borrowing is starting to move yields. The July budget deficit of US$432 billion was the largest for any month since March 2021. The 10-year auction on the same day cleared above last month’s result. A softer CPI did not lower the government’s borrowing cost.

3 · Older AI chips are holding their value. CoreWeave rose 19% after renting out 2020-vintage Nvidia chips through 2029. Nebius rose 34% after reporting 454% revenue growth. Renting 2020 chips through 2029 weakens the fear that AI hardware depreciates quickly. Technology led the US market on the day.

4 · Oil buyers are paying a risk premium for strait passage. Transits are running near 13 ships a day, close to a three-month low. Iran will not fully reopen the strait until its demands are met. Saudi Arabia is rerouting exports through a pipeline to the Mediterranean. Inventories are rising while the price holds.

§ 10 — Analysis & Nuances

The bond market is responding to supply, not inflation. The CPI report took 2 basis points off the 2-year yield and nothing off the 30-year. The 10-year auction only matched the market’s higher level. The question is why that level is higher in a month when inflation cooled. Today’s 30-year auction, against a previous result of 5.058%, is the direct test. A result at 5.20% or higher, with the 30-year yield ending the week at or above 5.24%, would confirm that bond supply is now driving long-term yields. A result near 5.10% would suggest Wednesday’s 10-year auction was noise. PPI adds a second test. Consensus of 4.9% against CPI at 3.4% means companies are absorbing cost increases. Friday’s retail sales will show whether they can pass them on.

Scorecard. The Brent test passed. A 17.4 million barrel build with the price above US$87.72 confirms the premium reflects strait risk rather than scarcity. The Nikkei test also passed, with Wednesday’s close of 67,524.06 above the 66,288.46 line. The KOSPI is 5.14% above its 6,257.45 floor and gold is 2.91% above its 4,341.10 marker. Both are scored on Friday. The credit question is open again after two readings totalling 10 basis points at CCC. The 2-year test is armed at 4.20%, between the 4.28% and 4.10% lines.

FAIRCURVE · MARKET PULSE · 13 AUG 2026 · Data: Financial Modeling Prep and FRED (ICE BofA credit spreads). All figures reference the Wednesday 12 August 2026 session unless stated. Not investment advice. For informational use only.