Market Review: August 18, 2026

Closing Recap

Tuesday, August 18, 2026

U.S. stocks ended lower for a third consecutive day, as the tech heavy Nasdaq Composite underperformed, dragged down by a sell-off in semiconductors as the SOX fell as much as 6% this morning, back below key technical levels after jumping the day prior while Smallcaps also faltered. The combination of a run in Treasury yields to multi year highs coupled with oil prices at multi week highs was enough to damage broader markets with light volumes in August summer trading. Chances of a Fed rate hike at the September meeting have dwindled in recent days following several weaker economic data reports including a decline in monthly jobs, weaker retail sales and cooler CPI/PPI inflation, yet, the 30-year Treasury yield touched 5.3371%, highest level since 2007 this morning before paring back. The Nasdaq fell over 1% as Treasury yields pressure rate-sensitive technology stocks, as data center, semis and AI names tumbled. Attention turns back to retailers tomorrow morning with earnings from Target (TGT), Lowe’s (LOW), and TJ Maxx (TJX). Precious metals fell, Bitcoin bounced, the dollar was flattish, oil rose and Treasury yields ended lower.

• Import prices fell (-0.4%) in July, versus +0.1% expected while July export prices fell (-1.3%) vs. consensus +0.2% and vs June (-0.7%). July y/y import prices rose +5.9% (down from +7.1%), while export prices rose +8.2% (down from +10.2% m/m). U.S. July non-petroleum import prices +0.3%, year-over-year +4.5% and July Petroleum import prices (-7.5%) vs June (-4.3%).
• July Industrial Capacity Utilization reported at 76.3% (in line with expected) while June was revised up to 76.2% from 76.1%; Manufacturing capacity utilization: 76.0% (up from 75.7% in June, +30 bps). July Industrial Output +0.2% (vs. consensus +0.3%) vs June +0.3%.
• July Pending Home sales -2.2% from July 2025 while U.S. July Pending Home sales index -2.3% (est. +0.3%) to 71.2.
• The US Treasury International Capital report for June showed total net TIC flows of $133.5B (prior: $131.5B) and net long-term flows of $172.7B (prior: $231.2B). The headline was broadly stable month-on-month, but the $60bn deceleration in long-term flows was the standout.
• Total foreign holdings of US treasury fell $72.1B in June — the largest single-month decline since March’s $134.4B plunge and the second largest of 2026.

• Oil prices were slightly higher, gaining for a third straight session, with WTI crude oil rising $0.44 or 0.52% to settle at $84.94 per barrel and Brent crude edges higher $0.15 or 0.17% to $91.02 per barrel as prospects for a U.S.-Iranian peace deal dimmed after Tehran said it would adopt a more offensive stance and Washington ruled out extending a ceasefire deal.

• Sporting Goods retail: AS Q2 revenue rose 32% y/y to $1.63B topping est. $1.54B, while adjusted EPS for Q2 rose $0.18; raises full-year 2026 revenue growth guidance to about 24% and now sees 2026 gross margin at 60.5–61.0% and operating margin at 14.2–14.5%; said strong Q2 revenue growth was driven by Technical Apparel, Outdoor Performance, and Ball & Racquet (Wilson Tennis 360).
• Apparel Retail: ANF was downgraded at Raymond James to Market Perform from Outperform citing valuation with the shares up 25% since the Q1 results as the firm sees a balanced risk/reward with the stock around $105; expects Abercrombie same-store sales to remain mixed. Beaten up retailers LULU and NKE saw notable gains today – still big decliners on year (LULU down -42% YTD and NKE -36.5% YTD).
• Hardline/Warehouse retail: COST plans to soon rollout Costco-branded Medicare plans, working with SCAN Group, the Wall Street Journal reports. The two companies would start selling their jointly named Medicare Advantage in two states and a Medicare supplement in a third state. TGT reports tomorrow morning.
• Specialty Retail: BBWI was upgraded to Buy at Citigroup saying believes the combination of a Q2 EPS beat, positive tone about recent product launches, and potential upside to estimates from energy prices/tariff refunds, along with a depressed stock price creates a very attractive risk/reward.

• Auto sector: ATHM was downgraded to Underperform at Bank America saying the company is facing significant earnings pressure from auto industry headwinds and its business transition, and notes Autohome has weaker financials and higher industry risk vs other China online vertical platforms.  CVNA shares were notably weaker as the WSJ reported worries swirling that a federal investigation into one of its investors, Mark Walter, could lead to the billionaire selling his stake of the used car retailer.

• Utility/Solar sector: NEE extends its winning streak to 8 days (approaching its 50dma of $87.15); UGI shares jumped after the WSJ reported late morning that the natural gas and electricity distributor recently received a roughly $9B takeover offer from KKR. https://tinyurl.com/y3kv6t62
• Machinery & Equipment: TAYD Q4 sales fell sharply y/y to $8.95M due to delayed customer orders (est. $12.8M) as Q4 net income and EPS declined from prior year, reflecting lower sales volume; ended FY26 with record $52.8M firm order backlog, led by Aerospace/Defense. IR shares remain weak, falling for a 9th straight day as dips below its 200dma support $81.95.
• Industrial Metals sector: FLXS says consumer demand for furniture remains pressured by macroeconomic uncertainty related to ongoing conflict in Middle East; Q4 adj EPS $1.33 vs est $1.09 on revs $115.365Mm vs est $109.66Mm, gr mgn 30%; guides Q1 revs $111-115Mm vs est $106.8Mm.

• Brokers & Banks: GS said it will buy commercial real estate investor LCN Capital Partners for as much as $410M, paying about $260M upfront for LCN, with a further potential payout of up to $150M tied to future performance targets and service commitments (about 80% will be paid in stock)
• Crypto sector: Bitcoin and Ethereum have seen gains the last few days with Bitcoin rising to $65,750; The SEC today proposed new rules that would create "a clear and fit-for-purpose framework for certain investment contracts involving crypto assets," according to a news release.
• Lending sector: U.S. auto loan delinquency 90+ days past due near 23-year high as debt reaches $1.713 Trillion (name sin auto lending to watch CVNA, OMF, ALLY, CACC).
• Insurance sector: AON announced CFO Edmund Resse is leaving after 2 years to pursue opportunities outside AON. Nadin Virani Global head of Corp planning and analytics will serve interim CFO; affirmed FY’26 guide targeting 70-80bps adj margin expansion with mid-single digit + organic growth.
• In REITs: Keybanc changes in Retail REITs, upgrading AKR to Overweight from Sector Weight ($25 PT) and downgrading KRG to Sector Weight from Overweight. AKR’s YTD underperformance (+3.4%, -1,480 bps vs. Shopping Center REITs and -1,520 bps vs. the RMS) has created an attractive entry point as visibility improves around several earnings growth drivers. REXR agreed to sell a portfolio of 22 industrial properties to an affiliate of EQT Real Estate for about $1.2 billion, part of its $2 billion plan to dispose of non-core assets and recycle capital.

• BMRN said it has agreed to acquire privately held drug developer Alesta Therapeutics to gain access to ALE1, an experimental treatment for the rare genetic disorder hypophosphatasia; will pay $275M upfront and up to $215M in added payments tied to certain development and regulatory milestones.
• Healthcare Services: DCGO 2Q revenue/EBITDA below consensus while 2026 revenue guidance maintained, though EBITDA loss increased. Continues to target breakeven EBITDA exiting 2026.
• Dental sector: Piper noted ALGN Clear aligner volumes measured across Piper’s data set of several hundred U.S. orthodontic offices declined 8.2% Y/y in July while teens were also down a similar amount (7.2%) and underperformed B&W by the widest margin of the year (8 points).
• Medical Equipment sector: HAE disclosed a non-exclusive agreement in which CSL Pharma may utilize the company’s sNExSys PCS devices with Persona PLUS technology and related disposables in the US.

• Internet/Online services; BIDU shares fell after Q2 revs fell -4% y/y to RMB31.33B vs. est. RMB31.96; said Q2 revenue from AI Cloud Infra rose 50% y/y, driven by mounting demand for public cloud-based AI computing; Revenue from AI Applications increased 3% y/y, reflecting only modest expansion; online marketing services segment reported total revenue of 13.1B yuan in Q2, down -19% y/y. DUOL was upgraded to Buy at Davidson with $160 tgt saying the company’s product enhancements, marketing changes and continued monetization improvements are underappreciated by investors as sees a long runway for growth in coming years.
• Media Sector: The WSJ reported DIS ABC has sued the Federal Communications Commission (FCC) alleging the agency’s efforts to challenge its Broadcast licenses and regulate its talk show "The View" are illegal and an effort to quash speech the Trump administration finds objectionable.

• Opticals, Photonics & Networking: FN quarterly results beat on top and bottom line, largely on DCI strength but shares tumbled as Datacom and HPC missed estimates again in FQ4; new capacity on track and new programs ramping to fuel growth in FY27 and beyond; now has four 10% customers, up from two y/y; shares of the optical sector, which has surged massively recently (AAOI, COHR, LITE, CIEN) saw a notable pullback today.
• Software sector: a rebound for the group after broad weakness on Monday; WEAV shares jumped after Francisco Partners announced that FP has entered into a definitive agreement to acquire Weave, at an aggregate equity valuation of approximately $650M. Under the terms of the agreement, Weave stockholders will receive $7.40 per share in cash.
• Handhelds & Telecom: Xiaomi (XIACY) Q2 Revenue fell -6.1% y/y to RMB108.92B vs. RMB115.96B; Q2 Gross Profit RMB21.61B vs. RMB26.10B y/y; Q2 basic EPS RMB0.37 vs. RMB0.46 y/y and H1 Revenue RMB208.06B vs. RMB227.25B y/y; said expects memory price increase to slow down in 2H; Q2 Smartphone revenue fell -7.5% y/y to RMB42.12B, while IoT and lifestyle products revenue declined 19.2% to RMB31.28B; Smart EV, AI and other new initiatives revenue increased 17.1% y/y.