US Stock Market Weekly Wrap: Dow Jones Drops 340 Pts; Nasdaq, S&P 500 Ends The Week In Green; Here's Why

The US stock market ended the trading week between August 9th to August 14th on a mixed note, with Dow Jones emerging as an underperformer while the Nasdaq and S&P 500 closed in the green. A host of events played a role in determining the sentiment on Wall Street, of which CPI and PPI inflation along with US-Iran developments were key focal points. Overall, investors are broadly cautious, and longer-term risks remain elevated.

US Stock Market Weekly Wrap

The Dow Jones Industrial Average, or DJIA index, ended the week at 53,732.41, recording a 0.63% or 340.25 points dip.

On the other hand, Nasdaq and S&P 500 ended the week in the green, but the gains were marginal. For instance, the Nasdaq closed at 26,729.16 with gains of 48.72 points or 0.18% in 5 days.

While S&P 500 index closed at 7,785.76, marginally rising by 34.02 points or 0.44%. In both percentage and points, S&P 500 is outperformer against its counterparts.

On the last trading session, as per Trading Economics, University of Michigan's preliminary August sentiment index fell to 51, below forecasts of 55. Meanwhile, retail sales dropped in July by the most in over a year. The data, alongside weak jobs figures and soft inflation, suggested that the economy is showing signs of cooling. A slowdown in consumer spending could weigh on corporate profits and the stock market. Hyperscalers, including Meta (-0.9%), Oracle (-3.7%) and Amazon (-0.9%), posted losses. Heavyweight chipmakers closed mixed, with Broadcom down 5.9%, Intel losing 2%, and Nvidia edging lower, while AMD (+6.5%) and memory producers extended their strong gains from earlier in the week. Micron added 2.3% on bullish recommendations from analysts and brokers, while SanDisk jumped 7.4% following its 14% surge on Thursday.

"The retail sales report came in much softer than expected," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "Combined with the relatively soft jobs report, it may make people worry about a softening economy, but one month doesn't make a trend. A look under the hood in the second quarter GDP report showed strong underlying growth."

Earlier this week, US CPI inflation softened to 3.4% in July 2026 compared to 3.5% in June, which was in-line with expectations. The CPI has moved further away from its 2023 high of 4.2%.

This has eased the odds of a rate hike to 33.1% from earlier 40-50%. The market believes there is a 66.9% chance of the US Federal Reserve keeping rates unchanged in September policy, as per the CME Group tracker.

Another key inflation data point is the PPI index, which came in at 4.7% in July 2026.

What Is Happening In West Asia?

The latest development in West Asia is that the US Treasury Secretary Scott Bessent warned Washington to impose unprecedented economic measures while continuing its naval blockade of Iranian ports. He said further announcements will be made next week.

Following no resolution between the US and Iran, the International Energy Agency has signaled a severe global supply deficit. It forecasted the widest shortfall in 2026 in five years.

Meanwhile, Iran and Oman have yet to reach an agreement on reopening Hormuz, despite earlier optimism that a deal was close. US officials said American forces are increasing their ability to escort vessels through the strait, although shipping remains risky, with some tankers switching off transponders. In the Red Sea, Iran-backed Houthi militants also targeted Saudi Arabia's Jazan refinery. Meanwhile, additional Middle Eastern crude is expected to reach the US, offering some relief to low inventories, as per Trading Economics.

This pushed crude oil prices higher, and that further dampened sentiments in US equities. Both US WTI and Brent crude surged by over 5% each this week and are elevated around $83 per barrel and $89 per barrel.

What To Expect In Wall Street Ahead?

As per Charles Schwab's report, investor sentiment is unusually split: subdued surveys contrast with elevated stock allocations, persistent ETF inflows, and record margin debt, so the market is not yet showing a uniformly euphoric extreme.

Further, it pointed out that recent speculative excess has been unwound mainly through sharp rotations—especially in AI-related industries-rather than a broad index decline, creating the potential for reflexive rallies (sharp, short-lived market rebounds occurring after a period of heavy selling or a deep correction) in beaten-down market leaders.

Lastly, Schwab's believe that longer-term risks remain elevated: near-record household equity exposure and surging leverage have historically pointed to weaker forward returns, while the economy's growing reliance on the stock-market wealth effect raises the stakes of a potential prolonged downturn.

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