Market Review: August 12, 2026

Closing Recap

Wednesday, August 12, 2026

It was a perfect storm for Wall Street on Wednesday as the “AI” trade surged as earnings in key tech players (NBIS, CRWV, SMCI, LITE) boosted the broader sector and in-line inflation data led to a bounce in other sectors with major averages back near all-time highs. Fear has disappeared in recent weeks as the CBOE volatility index (VIX) hits over seven-month low, falling -5.7% down around 14.40 (2026 low) as Technology led, along with REITs as dividend paying sectors benefitted for a dip in Treasury yields on the CPI report. The CPI climbed 3.4% YoY in July, matching the consensus forecast and down from 3.5% the month before. Core CPI was up 2.5% vs 2.5% forecast and 2.6% the month before. Oil prices ended little changed as the situation in the Middle East remained volatile after a senior Iranian source said there had been no progress in talks to revive the interim deal agreed in June, but oil has not been a factor the last few days. Momentum, semis, opticals and Ai plays were today’s biggest winners in the S&P 500 along with REITs, Utilities and Consumer Staples while Consumer Discretionary, Communications and Materials were all down around -1%. Tomorrow attention turns back to inflation data with July Producer Prices (PPI) at 8:30 am et.

• U.S. July budget deficit $432B (significantly wider than the $348.3 billion economist estimate) and vs July 2025 deficit $291B. U.S. fiscal 2026 year-to-date deficit $1.799 trln vs comparable fiscal 2025 deficit $1.629 trln. U.S. July budget deficit largest since March 2021, and record high for month of July. U.S. July net customs receipts -$8.55B on gross receipts of $24.84B and refunds of $33.38B. U.S. July budget outlays $766B, record high for month of July, vs $630B in July 2025; receipts $334B vs $338B in July 2025.

• Treasury yields fell initially and precious metals rose following the monthly July inflation report for consumer prices (CPI), which came in higher than the previous month, m/m and y/y…but was exactly in-line with economist estimates easing inflation/rate hike fears ahead of the PPI tomorrow. The data gave a boost to Treasury prices initially as yields fell with the 2-Year Treasury yield dropped 4 bps to 4.17% and the 10-yr yield also declined 3 basis points, settling at 4.65% (but yields later bounced).
• Treasury yields partially recover from morning declines triggered by lukewarm July inflation, while the dollar strengthens. Treasury yields slipped initially following the in-line CPI inflation reading while the Treasury 10-year note auction draws highest yield since 2007. The US Treasury sold $53B in 10-year notes at a high yield of 4.683% (tail of 0.1 BPS), with the bid/cover ratio 2.53 as Primary dealers awarded 8.6%, Directs 14.67% and Indirects 76.73%. The Dollar Index rises 0.1%, reversing its morning losses.

• Retailer sector: GAP was downgraded from Buy to Hold at Jefferies and cut tgt to $23 from $29 saying they are increasingly concerned about softer trends at Old Navy (data pointing to higher promos & weakening survey metrics); notes Q2 represents the easiest comparison of the year, yet trends lag. Pandora (PNDRY) said EBIT for the April-June period came in at 1.46B Danish crowns ($225.35M), against an average estimate of 1.10B; raises forecast as now expects organic growth at between 0% and 3% in 2026, up from a previous range of -1% to 2%, and an operating profit margin between 22% and 23%, up from 21% to 22%.
• In Food & Beverages: PFGC Q4 adj EPS $1.59 just below est. $160 while revs rose 6.4% y/y to $18B vs. est. $18.09B, while guides Q1 revs $17.9B-$18.1B, below consensus $18.13B and sees FY27 revenue $72.5B-$73B, consensus $72.68B; BGS Q2 adj. EPS $0.06 vs. est. $0.07, miss; sales $383.3Mm vs est $395.95Mm; adj. EBITDA $60.4Mm vs est $60.56Mm; FY sales guidance $1.735B-$1.775B vs. est. $1.747B; FY adj. EBITDA guidance $275Mm-$290Mm vs. est. $278.8Mm.
• In Auto sector (GM, F, STLA): The Globe & Mail reported Canadian officials are considering a proposal that would have Ottawa accept U.S. auto tariffs in exchange for cutting levies for vehicles compliant with USMCA, citing three sources "on both sides of the border." The proposal under consideration would also keep an exemption for the value of U.S. content in cars exported from Canada.

• Leisure Activity/products: theater chain NCMI shares fall as Q2 EPS loss (-$0.10) vs. est. loss (-$0.09); Q2 revenue $58.4M miss est. $59.52M; entered into a definitive agreement to acquire Captivate Holdings, LLC, an operator of digital video elevator and lobby advertising in N.A at an enterprise value of $275M.

• Global oil supply will fall by 4.3M barrels per day, or around 4%, this year, the International Energy Agency (IEA) said in its monthly oil market report; the expected supply drop compares with the 3.7M bpd forecast in the IEA’s July report and will take total supply to the IEA’s lowest forecast yet for this year at 102.02M bpd.
• Power sector: BE shares rise on back of NBIS results after the company commented on the Vineland, NJ site and the switch to Bloom: “The amendment to the site layout plan was a result of the decision to switch the project’s power source to Bloom.” Form Energy, a startup that makes giant iron-air batteries that store enough power to last several days has raised a new round of funding valued at $750M. The Co has now raised more than $2B in total, plans to use the money to boost manufacturing at its Weirton, W.Va., plant and for its first Wave of commercial projects, including a project for the utility Xcel Energy in partnership with GOOGL. SMR said may offer up to $750M of common stock under at-the-market sales agreement. TE Q2 cont ops EPS loss (-$0.14) vs. est. loss (-$0.10) on revs $250.13M above est. $198.84M and expects G1_Dallas 2026 production at the higher end of 3.1-4.2 GW range.

• Brokers & Exchanges: GS said it will acquire exchange-traded funds provider Neos Investments for as much as $2.25B, as the investment bank looks to bolster its presence in asset management. Neos, which provides ETFs on systematic options-based income, managed $30B in assets across 19 funds.
• In Financial Services: HRB rises on results as Q4 adj. EPS $2.38 tops est $2.21; revenue $1.14B vs est $1.118B; FY adj. EPS $5.31 vs. est. $5.16, beat; FY revenue $3.95B vs. est. $3.92B, beat; FY27 revenue guidance $4.11B-$4.16B vs est $4.054B; FY27 adj. EPS guidance $6.04-$6.24 vs est $5.86.

• DFTX study met primary and all key secondary efficacy endpoints; announces positive topline results from phase 3 Voyage study of DT120 ODT in generalized anxiety disorder; participants receiving DT120 ODT achieved a statistically significant reduction in Hamilton Anxiety Rating Scale (HAM-A) score.
• LEGN was downgraded to Perform from Outperform at Oppenheimer noting following in vivo CART readout on 6/2, LEGN significantly underperformed (-40% vs XBI’s +24%); moves to sidelines until clarity is provided around new CEO, their relationship/alignment with the Board (misalignment may have caused CEO departure), and Carvykti/pipeline strategy.
• NBIX shares fell after experts in Prader-Willi Syndrome raised safety concerns over its Vykat XR drug (which they acquired from Soleno in a $2.9B deal in May) , citing serious adverse events reported in patients with the rare genetic disorder. The FDA Adverse Event Monitoring System (AEMS) showed seven reports of death linked to patients taking the drug as of July 31, 2026
• SMMT rises after its partner Akeso announced the marketing authorization in China for the use of ivonescimab, in combination with chemotherapy, for the first-line treatment of patients with advanced squamous non-small cell lung cancer 9also upgraded at Leerink today).

• Medical Testing/Labs: FRNM said the FDA grants breakthrough device designation to Freenome’s blood-based Simple Screen lung cancer screening test

• Chemical sector: Bloomberg reported that activist investor Ancora Holdings Group is offering as much as $1.2B buy FUL’s building adhesives operation, escalating a campaign that previously focused on opposing the chemical maker’s acquisition of a British medical-products company.

• Media sector: Josh Kushner and Bob Iger are purchasing the Los Angeles Lakers for more than $12 billion in a record-breaking deal, ESPN reported on Wednesday, citing sources with knowledge of the deal. Billionaire Mark Walter purchased a majority stake of the NBA team last year in a deal that valued the club at $10 billion, with the deal only having been approved by the board of governors in October. Shares of other public franchises moved in reaction (MSGS).

• Hardware: GOOGL raises prices of new phones on "severe" memory crunch. As debuts Pixel 11, Pixel 11 Pro, Pixel 11 Pro XL and Pixel 11 Pro Fold smartphones. New smartphones start at $899, while the foldable starts at $1,899.. New phones are $100 more expensive than the previous generation, citing a “severe” memory crunch. Announces upgraded Pixel Watch 5 starting at $399.
• Electrical Components & Parts: VELO shares rise on results as Q2 EPS loss (-$0.30) vs. est. loss (-$0.27); Q2 revs rose 52.3% y/y to $20.7M vs. est. $13.52M; raises FY26 revenue view to $65M-$75M from $60M-$70M (est. $64.16M); sees greater than 30% gross margin in 2H’26.
• Quantum compute sector: QNT reported Q2 adj EPS loss (-$0.28) vs. est. loss (-$0.26); Q2 revs $8M vs. est. $7.6M; sees FY26 revenue $28M-$32M, vs. consensus $26.47M; to partner with ORCL to accelerate hybrid quantum compute adoption on Oracle Cloud infrastructure.
• Software sector: with AI, semis, opticals and data centers rallying on Wednesday, investors were taking some recent profits in the software sector which has jumped meaningfully the last few weeks behind better earnings results from names like NOW, TEAM, TWLO, MSFT and others. In Security Software, OKTA was upgraded to Outperform from Market Perform at Citizens with $170 PT heading into earnings saying identity continues to be viewed as the most strategically important layer in Ai Security based on its industry discussions and says the near-term backdrop appears favorable. ORCL outperforms a weaker Software sector, helped by the better CRWV results with strong showing is helping reinforce Ai infrastructure demand optimism alongside Oracle-specific catalysts (layoffs for efficiency + Quantum/cloud news with QNT last night too)

• Hon Hai Precision Industry Co. reported a better-than-expected increase in quarterly profit, signaling robust global demand for AI hardware; Net income for the three months ended in June grew 35% to NT$60 billion ($1.9 billion), versus the average analyst projection of NT$58.4 billion. The company previously reported a 40% rise in quarterly sales. Revenue in July jumped 54.2% to NT$946.5 billion.
• U.S. memory stocks rose in overnight trading (MU, SNDK, SKHY) after reports that Singapore’s sovereign wealth fund Temasek is planning to invest in Samsung Electronics and SK Hynix triggered a rally in South Korean stocks. Separately, Trendforce reported that consumer DRAM remains tight, with contract prices still rising but at a decelerating pace, while spot trading stays quiet and price consensus remains elusive
• SMCI shares rise as Q4 results were in line with pre-announced levels and, positively, FY27 revenue outlook was far above consensus (expects annual revenue between $65B-$72B, ahead of estimates of $52.50B) as SMCI noted diversity of the backlog in terms of customers as well as products.
• VLN rises after results and guides Q3 revenue $21.3M-$21.7M, above consensus $19.37M and sees gross margin to range between 60-62% and raises FY26 revenue view to $78M-$81M from $75M-$77M