Stock Market Commentary August 2026
As summer transitions into fall, the economy has continued to show strength. While oil prices stabilized after earlier volatility, consumer confidence remains solid and inflation continues to cool. The stock market has responded positively to these fundamentals.
However, with mid-term elections just three months away, political uncertainty could introduce additional market volatility in the coming months.
Economic Strength Persists While Oil Markets Stabilize
Throughout August, economic data has continued to show resilience. Job creation remains steady, and consumer spending has held up well despite earlier concerns about potential recession (1). Oil prices, which had spiked during geopolitical tensions in the Middle East, have stabilized in the $70-80 per barrel range (2).
This stabilization takes pressure off energy costs and supports the broader economy. In our opinion, the combination of steady job creation, solid consumer spending, and stable energy prices creates a supportive backdrop for continued economic growth.
Inflation Continues to Decline Toward Federal Reserve Target
One of the most encouraging developments is the continued decline in inflation. Core PCE inflation has been moving steadily lower and is approaching the Federal Reserve's 2% target (3).
Lower inflation means consumers have more purchasing power and businesses have greater certainty in their planning. The Fed now has more flexibility in its policy decisions, which could support continued economic expansion.
In our opinion, declining inflation combined with steady job growth creates an ideal environment for financial markets.
Election Uncertainty May Drive Fall Market Volatility
Despite these positive economic fundamentals, one major uncertainty looms: the mid-term elections in November. Historically, markets dislike uncertainty, and election seasons typically bring periods of volatility.
Questions about which party will control the House and Senate could create periodic pullbacks or swings in the market (4).
However, we believe that strong economic fundamentals—steady job creation, declining inflation, and solid consumer spending—should provide a floor for market performance even if political uncertainty creates near-term swings.
Our team is actively monitoring economic data, market trends, and political developments. We remain positioned to take advantage of any market dislocations while maintaining disciplined, diversified portfolios aligned with our clients' long-term goals.
Schedule Your Portfolio Review
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Sincerely,
Robert L. Wink, Kenneth R. Wink, James D. Wink, Zachary A. Bachner, CFP®, James C. Baldwin, and Daniel Ladzinski
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Ken Wink
Kenneth “Ken” Wink is the Co-Founder and Chief Compliance Officer of Summit Financial Consulting, LLC. With over 22 years of experience in the financial services industry, he is deeply knowledgeable and passionate about explaining complex financial concepts in understandable terms. Ken’s passion for simplifying complex financial concepts began early. While still in high school, he honed his skills by assisting classmates with their tax returns. This led him to pursue a B.A. in Finance at Michigan State University, graduating with honors. He further bolstered his qualifications by obtaining numerous financial licenses, including Series 6, 7, 63, and 65, along with Life, Health, and Accident licenses. Ken believes that everyone deserves to make informed financial decisions without feeling overwhelmed or intimidated. That’s why he writes articles that break down complex concepts into understandable terms, empowering you to navigate your financial future with confidence.