August is supposed to be a quiet month. It rarely is anymore, and this year was no exception.
All three major indexes finished higher for the month, with the Nasdaq Composite leading the way up nearly 4%, the S&P 500 gaining 2.6%, and the Dow adding 1.3%. But the headline story of August wasn’t stocks. It was gold, which surged over 10% for its strongest monthly gain since January, and the bond market, which sent yields to their highest levels in over a year before partially pulling back.
The month began with a bang. The July jobs report, released the first Friday of August, showed the U.S. economy lost 23,000 jobs, a number that immediately shifted expectations around Federal Reserve policy. Markets interpreted the weak data as confirmation that the Fed had little reason to raise rates, and stocks surged. The S&P 500 posted its best single week of the year, the Dow crossed 54,000 for the first time, and the Nasdaq jumped over 5%.
What followed was a more complicated picture. Treasury yields climbed sharply throughout the month, with the 10-year reaching 4.75% by month’s end, its highest level since early 2025. The move was driven by a combination of heavy government and corporate debt issuance, lingering inflation concerns, and, in the middle of the month, an extraordinary intervention by the Treasury Department, which announced it would double its buyback of longer-dated bonds to stabilize the market. The announcement worked temporarily, but yields climbed back. The bond market is telling us something about the longer-term fiscal picture, and it’s worth watching.
Nvidia’s earnings in late August were the marquee corporate event of the month. Results were extraordinary, with revenue nearly doubling year over year, driven by AI chip and data center demand. The initial market reaction was euphoric. But by the time Fed Chair Warsh took the podium at Jackson Hole the following Friday, much of that enthusiasm had been tempered. Warsh delivered a clear message: inflation is not easing fast enough, and the Fed is not done. Markets repriced accordingly.
Gold was the standout asset of August, surging over 10% for its best monthly performance of the year. A weaker dollar mid-month, the Treasury’s bond buyback announcement, and persistent uncertainty around U.S. fiscal policy and the Iran conflict all fueled the move. Even as gold gave back some gains in the final days of the month, it remains one of the strongest performing assets of 2026.
Oil was essentially flat for the month, masking an extraordinary amount of volatility underneath. WTI crude swung sharply in both directions as the Iran situation lurched between escalation and diplomacy. The Strait of Hormuz remains a live issue, and energy markets will continue to be sensitive to any developments on that front.
The VIX fell modestly for the month, closing below 15, a relatively calm reading that suggests investors, while alert, are not broadly anxious.
