Stock Market Recap — August 12, 2026

📊 Alain’s Holdings — August 12, 2026
Symbol	Name	Price	Change	Change %
VOO	Vanguard S&P 500 ETF	710.17	+1.75	+0.25%
QQQ	Invesco QQQ Trust	723.70	+5.25	+0.73%
XIU.TO	iShares S&P/TSX 60 ETF	54.58	+0.30	+0.55%

Wall Street finished modestly higher Wednesday after a closely watched inflation report showed that price pressures eased slightly in July, giving investors some reassurance that the Federal Reserve may not need to raise interest rates in September.

Technology stocks led the gains, while the Dow finished essentially unchanged.

Market Performance

📈 Nasdaq Composite: +0.5%
📈 S&P 500: +0.3%
➖ Dow Jones Industrial Average: just below flat

After two consecutive losing sessions, investors welcomed evidence that inflation is moving—however slowly—in the right direction.

Inflation Falls to 3.4%

The biggest story of the day was the Consumer Price Index (CPI).

Annual inflation eased to 3.4% in July, down from 3.5% in June and matching economists’ expectations.

On a monthly basis, consumer prices increased just 0.1%.

That’s encouraging.

But there’s an important caveat.

Inflation remains considerably above the Federal Reserve’s 2% target, meaning policymakers aren’t ready to declare victory.

Before today’s report, markets were roughly divided over whether the Fed would raise rates at its September meeting.

Following the CPI release, traders shifted toward expecting the Fed to hold rates steady.

The Fed Faces a Difficult Decision

The last two major economic reports have now sent an interesting message.

Last Friday’s jobs report showed that the U.S. economy unexpectedly lost 23,000 jobs in July.

Today’s report showed inflation cooling to 3.4%.

Together, those numbers strengthen the argument for leaving interest rates unchanged.

But the situation remains complicated.

Inflation is still too high, and rising energy prices could reverse some of the recent progress.

The Federal Reserve therefore faces a delicate balancing act: fight inflation without unnecessarily weakening an already cooling labor market.

Oil Near $90 Remains the Wild Card

The biggest threat to the improving inflation picture may be energy.

Brent crude approached $90 per barrel as negotiations between the United States and Iran over reopening the Strait of Hormuz remained deadlocked.

Renewed tensions in the Gulf have kept oil prices elevated despite hopes earlier this month that an agreement was close.

If oil remains near $90—or moves higher—higher transportation, manufacturing and energy costs could eventually work their way back into consumer prices.

That could complicate the Fed’s decision considerably.

AI Earnings Continue

The tail end of earnings season also continues to provide clues about the artificial intelligence boom.

Cisco Systems, Coherent and Cerebras Systems were among the companies reporting results Wednesday.

Investors have become increasingly interested in companies supplying the infrastructure behind AI—not just the companies developing AI models.

Chips, networking equipment, servers, data centers, electricity and cloud computing are becoming an enormous investment ecosystem.

But after months of extraordinary spending, Wall Street increasingly wants to know when those investments will translate into sustainable profits.

The Bottom Line

Today’s CPI report provided investors with some welcome news.

Inflation is cooling.

But at 3.4%, it remains well above the Federal Reserve’s target.

Meanwhile, the economy is showing signs of weaker employment, and oil near $90 threatens to create another round of inflationary pressure.

That leaves the Fed with no easy choice.

For investors, however, today’s report shifted the balance slightly.

After weeks of worrying about another rate hike, Wall Street increasingly believes the Federal Reserve may simply stay put in September.

For now, that was enough to put stocks back in positive territory.

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