Market Report, 2026-08-21

Stocks saw a nice rally on Friday but still finished lower for the week, as lofty Treasury yields and concerns surrounding government borrowing weighed on sentiment. Friday’s recovery was supported by encouraging business activity and corporate earnings, but the broader weekly picture remained pressured by higher rates, oil prices, and weakness in technology and AI-related shares.

For the week, the Dow Jones Industrial Average fell 0.8% to 53,277, the NASDAQ Composite declined 2.1% to 26,180, and the S&P 500 lost 1.4% to 7,674. Beneath the surface, healthcare was the standout performer, helped by strength in biotechnology, while energy and materials also finished higher. Technology-related shares were among the weaker areas, as concerns about elevated yields continued to pressure growth-stock valuations. We feel like this is more of a healthy pause, as stocks are still near all-time highs.

Treasury yields moved just slightly higher over the week after the US Treasury added liquidity, with the 5-year yield rising approximately 3 basis points to 4.39% and the 10-year yield increasing roughly 2 basis points to 4.71%. The bond market continued to focus on federal deficits, heavy borrowing needs, and inflation risks from elevated oil prices, limiting the relief generated by the Treasury Department’s expanded bond-buyback program.

Economic data provided a more constructive signal on Friday. U.S. business activity strengthened, as services accelerated to their best pace in nearly two years, while manufacturing remained in expansion territory but softened somewhat. The results suggested that underlying economic activity remains resilient despite elevated borrowing costs.

Looking ahead, investors will focus on next week’s consumer confidence reading, consumer spending data for July, and inflation data for further clues on the economy and monetary policy. That’s it for this week. Adams Wealth Advisors will be back next week to keep you informed on the markets and economy.