Fidelity Bank – Wealth Management
Market Recap – August 2026
August saw markets continue their advance, supported by gains across U.S. equities, international stocks, fixed income, and commodities. Leadership rotated back toward growth-oriented areas of the market following July’s value-led environment, as large-cap growth stocks and technology companies drove equity returns higher. International markets also contributed positively, with emerging markets outperforming developed markets, while fixed income generated modest gains as relatively stable interest rates and attractive yields supported performance. Real assets were among the strongest-performing areas of the market, led by gains in precious metals, agriculture, and energy. The result was a broadly constructive month characterized by improving participation across asset classes, renewed strength in growth-oriented equities, and continued investor demand for companies with durable earnings growth and strong business fundamentals.
Equity
U.S. equities posted solid gains in August. The S&P 500 rose 2.72%, while the Russell 1000 gained 2.82%. Growth regained leadership following July’s value rotation, as the Russell 1000 Growth Index advanced 3.73%, outperforming the Russell 1000 Value Index, which gained 2.03%. Large-cap growth companies benefitted from continued earnings strength and renewed investor interest in technology-related themes.
Small-cap equities also moved higher, although they lagged large-cap stocks. The Russell 2000 gained 0.98%, with Russell 2000 Growth up 1.64% and Russell 2000 Value rising 0.30%. While participation broadened across the market, larger and higher-quality companies remained favored by investors.
Sector performance was led by Energy (+7.38%) and Technology (+6.37%). Health Care (+4.89%), Materials (+4.56%), and Communication Services (+3.03%) also produced strong gains. More defensive sectors lagged, with Utilities declining 4.77%, while Industrials (-2.56%) and Real Estate (-2.05%) posted modest losses.
International equities continued to advance. MSCI EAFE gained 1.99%, with MSCI EAFE Growth rising 2.55% compared to MSCI EAFE Value at 1.45%. Emerging markets outperformed developed markets, with MSCI Emerging Markets advancing 3.37%, supported by improving commodity markets and positive capital flows. Japan also contributed to returns, with MSCI Japan gaining 3.35% in U.S. dollar terms.
Fixed Income
Fixed income generated modest gains in August as income remained the primary driver of returns. The Bloomberg U.S. Aggregate Bond Index gained 0.39%, while the U.S. Treasury Index rose 0.31%. Interest-rate movements remained relatively contained throughout the month, resulting in generally stable bond market performance.
Credit sectors outperformed government securities. Investment-grade corporates gained 0.43%, while high-yield bonds advanced 0.97%, as credit spreads remained supportive and economic conditions remained stable. Emerging-market local currency debt also performed well, gaining 1.22%.
Municipal bonds were mixed. The Bloomberg Municipal Bond Index declined 0.23%, while high-yield municipal bonds gained 0.22%. Treasury bills continued to provide attractive short-term income, returning 0.29% during the month. TIPS gained 0.04%, reflecting generally stable inflation expectations.
Real Assets
Real assets delivered some of the strongest returns of the month. The Bloomberg Commodity Index rose 7.39%, supported by broad-based strength across multiple commodity sectors. Energy continued to contribute positively, with the Bloomberg Energy Sub-Index rising 5.55% and WTI crude oil advancing 2.68%. Gasoline prices also moved higher, gaining 6.97%.
Precious metals were among the best-performing asset classes. Gold rose 9.12%, while the broader precious metals complex gained 10.43%. Agricultural commodities also posted strong gains, with the Agriculture Sub-Index rising 12.77% and Soft Commodities advancing 14.41%. Industrial metals increased 2.29%, benefiting from continued demand tied to global economic activity.
Not all real assets participated in the rally. The FTSE Nareit All Equity REITs Index declined 2.71%, while Natural Gas gained just 1.09%, continuing its pattern of elevated volatility relative to other commodity sectors.
Macroeconomics & Policy
Economic data released during August continued to point toward a resilient backdrop. Labor market conditions remained stable, consumer spending held up well, and corporate earnings generally exceeded expectations. While inflation remained an area of focus, commodity strength and solid economic activity did little to alter expectations for a measured approach from policymakers.
Central banks maintained a largely data-dependent stance, balancing stable economic growth against inflation objectives. Investors remained focused on earnings trends, economic growth, and valuation opportunities across asset classes.
By month-end, market leadership had shifted back toward growth-oriented sectors and commodity-related assets. While sector and style rotations continued to drive performance beneath the surface, the broader market backdrop remained constructive as investors favored companies with strong earnings growth and durable business fundamentals.
July 2026 Market Review is intended solely to report on various investment views held by Fidelity Deposit & Discount Bank and is distributed for informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. Fidelity Deposit & Discount Bank does not have any obligation to provide revised opinions in the event of changed circumstances. All data is provided by Bloomberg Finance, LP and Morningstar Direct. We believe the information provided here is reliable but should not be assumed to be accurate or complete. Data, if not otherwise noted, is as of 7/31/2026. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer or recommendation to purchase or sell a security. Past performance is no guarantee of future results. All investment strategies and investments involve risk of loss and nothing within this report should be construed as a guarantee of any specific outcome or profit. Investors should make their own investment decisions based on their specific investment objectives and financial circumstances and are encouraged to seek professional advice before making any decisions. Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index.