The S&P 500 (Index: SPX) shot up by nearly 3.6% over it's closing value in the previous week, reaching a new record high closing value of 7,757.46 by the end of the trading week ending on Friday, 7 August 2026.
Strong earnings being reported in the early part of the week provided much of the stock market's upward momentum, with technology and materials stocks providing much of the boost. The positive outlooks being reported by many firms in these sectors contributed to shifting the time horizon of investors forward from either 2026-Q3 (or 2026-Q4) to the more distant future quarter of 2027-Q1.
That change in how far forward investors are looking into the future as they set current day stock prices constitutes a Lévy flight event, which can be seen in the latest update of the dividend futures-based model's alternative futures chart.
On Friday, 7 August 2026, an unexpectedly negative jobs report changed the expected timing of when the Federal Reserve will change short term interest rates in the U.S. The CME Group's FedWatch Tool's outlook changed substantially with the unexpectedly sour employment situation report for July 2026. It now projects the Fed will hike the Federal Funds Rate by a quarter point on 28 October (2026-Q4), six weeks later than it projected a week earlier. It also now sees a greater than 50% chance of another quarter point rate hike on 17 March (2027-Q1).
Here are the other market moving headlines from the week that was:
- Monday, 3 August 2026
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- Signs and portents for the U.S. economy:
- Chinese state traders make large US soybean purchases
- Oil prices drop after Trump cancels attack on Iran to seek nuclear deal
- US manufacturing activity hits more than four-year high; input prices elevated
- Fed minions say they've got this inflation thing covered:
- Bigger trouble developing in China:
- BOJ minions team up with U.S. Treasury to prop up Japan's currency, worry about AI demand making inflation 'sticky':
- Japan, US confirm joint yen-buying intervention, signal more action
- Japan, Bretton Woods 2.0, & The End Of The Carry Era
- How a US-Japan pact to hit yen speculators came together
- Bessent ready to repeat joint yen intervention, urges bigger Fed backstop
- BOJ says global AI demand could have sticky inflationary effect
- Wall Street ended higher as markets flirt with record highs
- Tuesday, 4 August 2026
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- Signs and portents for the U.S. economy:
- Fed minion claims they have 'open mind':
- Global economy changes developing in China:
- BOJ minions leave door to more interventions to prop up yen open, JapanGov minion says inflation not so bad:
- Yen holds most gains as intervention keeps speculators on edge
- Japan may not have intervened in FX market on Monday despite yen's surge, BOJ data suggests
- Japan, US likely to intervene again if yen resumes slide, ex-BOJ official says
- Japan's economy minister offers sanguine view on inflation
- Mixed economic signs developing in Eurozone:
- Wall Street ended higher as the S&P 500 and Dow notched record closes
- Wednesday, 5 August 2026
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- Signs and portents for the U.S. economy:
- OpenAI, Anthropic AI agents implicated in new security breaches
- Oil prices rebound after Houthis say they attacked Saudi tanker
- US service sector maintains strong growth pace in July
- Fed minions say they're chafing at the bit to hike U.S. interest rates some more:
- Fed's Schmid calls for tighter monetary policy to tamp down on 'too high' inflation
- Fed's Cook ready to raise rates if inflation doesn't start easing
- Bigger trouble developing in China:
- China services growth hits slowest since September 2024, private PMI shows
- China launches global tax hunt going back decades
- BOJ minions thinking about hiking interest rate again, are asked to loan more money to Japan's government:
- BOJ debated mounting price risks even upon hiking rates in June, minutes show
- Japan PM Takaichi asked BOJ to buy more bonds when needed, Jiji reports
- ECB minions say AI is adding to Eurozone economy growth:
- Dow closes at record on Mideast optimism; SpaceX, AMD drag Nasdaq
- Thursday, 6 August 2026
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- Signs and portents for the U.S. economy:
- US labor market stable; worker productivity accelerates in second quarter
- Oil settles up $3 as Iran reviews bill to ban US, Israeli vessels from Hormuz
- One Fed minions not so anxious to hike U.S. interest rates, another wishes they already did:
- Fed's Daly says central bank was right to hold rates steady at July policy meeting
- Fed's Musalem says central bank should have hiked rates at last meeting
- Bigger trouble, stimulus developing in China:
- JapanGov minion says they're looking to tap BOJ minions' investment holdings to pay for tax cut:
- Wall Street ended lower as investors remain focused on Middle East developments
- Friday, 7 August 2026
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- Signs and portents for the U.S. economy:
- US suffers unexpected job losses in July, markets dial back rate hike expectations
- U.S. economy unexpectedly lost 23,000 jobs in July
- Expectations going into the July jobs report: US job growth likely picked up in July
- Brent climbs $1 on uncertainty over end to Iran war
- Fed minions expected to back off rate hike plans after jobs report:
- Market cuts odds of Fed hike after jobs data, but economists still see case for tightening
- Fed's Barkin says July jobs data matches recent trend
- Bigger trouble, stimulus developing in China:
- BOJ minions get unexpected boost in ongoing effort to prop up Japan's currency:
- Japan's yen surges after US jobs data, traders wary of intervention risk
- US euro sale to prop up yen blindsided ECB
- Bigger trouble developing in Eurozone:
- S&P closes at record high as soft jobs report eases rate-hike concerns
The Atlanta Fed's GDPNow tool anticipates real GDP growth for the U.S. economy of +5.8%, up from the +5.0% annualized growth it indicated at the end of July 2026.
Image credit: Bing Image Creator. Prompt: "An editorial cartoon of a Wall Street bull who is happy that strong earnings are boosting the S&P 500".