17 August 2026: Weekly Update – Inflation, Jobs and Record Equity Markets

The bigger shock came at the end of the prior week where payrolls were reported to have fallen by 23,000 in July, against forecasts of 80,000 to 95,000, and wage growth of 3.2% now sits behind inflation, so the average US worker took a real pay cut last month. Sticky prices next to a stalling jobs market is a harder call for the Fed.

None of this has slowed the progress of equity markets. The S&P 500 index has continued to set fresh records, as some of the year-to-date laggards turned into leaders. Microsoft has clawed its way back to a positive year to date return and Palantir has similarly moved up close to 30% over the last month on an earnings driven surge. Hyperscaler capex is on track for close to US$800bn this year, feeding into industrials and semiconductors, the same choppy Ceasefire Trade, AI Concentration setup we've flagged before. A market this reliant on a handful of names is vulnerable if one of them disappoints.

Oil and gold are both reacting to the same uncertainties. Brent has hovered in the high US$80s this week on the Iran-Oman talks over reopening the Strait of Hormuz, still running at a fraction of pre-conflict shipping volumes, while gold has rebounded to around US$4,400 on the softer CPI print but remains some US$1,000 off its January high. Overall, much of the commodity complex looks unsettled. Copper hit a fresh record in early August on tight supply and AI-driven grid demand while silver is in the early throes of clawing back from a roughly 50% correction after its own record high earlier this year.

Recent UK data has held up better than many have expected. June GDP rose 0.3% against a forecast of no growth, while UK CPI at 2.6% remains comfortably below the US figure. UK equities have had a strong run too, with the FTSE 100 hitting a record high in late July and up around a fifth over the past year. Bigger risk may sit elsewhere however. As a trade-dependent, energy-importing economy, the UK is more exposed than most to the kind of imported inflation shock coming out of the Middle East, and the Bank of England's own July vote, held 6-3 with three members pushing to hike, suggests policymakers share that concern.

Looking ahead, September is shaping up to be a finely balanced month for US policy: the 4 September jobs report feeds directly into the FOMC meeting on 15-16 September, and a weak payrolls print would pull the odds of a hike towards zero while a strong one keeps that possibility alive. For UK investors, the Bank of England’s 17 September meeting will be just as important given the UK’s exposure to imported inflation and the split of the vote at the last meeting. None of that carries the certainty of Wednesday's partial eclipse - the next total eclipse from the UK isn't due until 2090 and nobody needs to guess when it's coming.