Market Update, August 2026
Summarized for clarity and brevity: Originally written by JP Morgan
Growth
The U.S. economy grew at an annualized rate of 1.5% during the second quarter of 2026, down from 2.1% in the first quarter. While the headline number suggests growth is slowing, the overall economy remains in good shape. Consumer spending continued to support growth, while businesses kept investing, especially in artificial intelligence, technology, and infrastructure.
GDP Headwinds
Several temporary factors made second-quarter GDP growth look weaker than it really was. A large increase in imports reduced measured GDP growth, while the release of 89.4 million barrels from the Strategic Petroleum Reserve was counted as a reduction in government spending. At the same time, businesses continued to reduce inventories, creating another drag on growth. Together, these factors contributed to a weaker headline GDP number, even though the overall economy remained relatively strong.
Inventories
One of the most important trends highlighted in the report is the continued decline in inventories. Businesses have reduced inventory levels for five straight quarters, leaving stock levels unusually low. The inventory-to-sales ratio has fallen to 67.9 days, meaning businesses are carrying fewer goods relative to demand than they normally would. This level is lower than what was seen during the low points of the last three recessions. This trend cannot continue indefinitely and expects businesses to begin rebuilding inventories in the quarters ahead.
Estimates claim that if inventories had increased at their average pace over the last decade instead of declining, second-quarter GDP growth would have been approximately 3.06%, more than double the reported rate. This suggests the economy may be stronger than the headline GDP figure indicates.
Federal Policy
The Federal Open Market Committee left interest rates unchanged at a target range of 3.50% to 3.75%, reflecting a cautious approach as policymakers continue to monitor inflation and economic conditions. Consumer confidence declined modestly to 90.8 in July, but broader economic data continues to point to steady growth rather than a recession.
Markets
Financial markets responded positively during the week, with major stock indexes posting gains. The Nasdaq Composite led performance as investors continued to favor technology companies and businesses expected to benefit from AI-related growth. The S&P 500, Dow Jones Industrial Average, and other major benchmarks also moved higher, contributing to strong year-to-date gains across U.S. equities.
Sectors
Sector performance continues to reflect the strength of consumer spending. Consumer Discretionary stocks, which include retailers, travel companies, and restaurants, have been the strongest performing sector this year, followed by Communication Services and Financials.
Meanwhile, Energy has generated little to no year-to-date growth, while Industrials and Technology have posted more moderate gains. These trends suggest investors remain focused on sectors benefiting from strong consumer demand and long-term growth opportunities.
Commodities
Commodity prices remained mixed throughout the period. Oil prices stayed elevated, while gold and silver continued to trade near historic highs. These trends reflect ongoing concerns about geopolitical developments, inflation pressures, and uncertainty around the global economy, even as the broader economic outlook remains positive.
Outlook
The U.S. economy appears healthier than the headline GDP growth number suggests. Temporary factors such as lower inventories, higher imports, and Strategic Petroleum Reserve releases are expected to fade over time. With consumer spending remaining strong, business investment continuing to expand, and inventories likely to be rebuilt, the economy appears positioned for steady growth in the quarters ahead. This outlook supports a favorable environment for financial markets and risk assets despite ongoing economic and geopolitical challenges.
If you have any questions about the current market, or anything else, you can always contact us by giving us a call at (248) 879-4510 or sending an email to info@GlebaAndAssociates.com.
Invest Well. Manage Well. Live Well.
Gary is a Financial Associate at Gleba & Associates, Inc., joining our team in June 2020. After graduating from Walsh College with a Bachelor’s Degree in Finance in 2013, he began his career at Raymond James Financial Services. He then moved to the world of banking, working as a banker with Chase Private Client and then as an Assistant Vice President, Financial Advisor with PNC Investments. Gary has expertise in all aspects of financial planning including investment management, higher education planning, life insurance, and long-term care insurance needs analysis. When he gets away from the office, he loves to spend time with his wife, Lauren, and two daughters, Hadley and Harper. He enjoys woodworking, boating, summer weekends at the family cottage, spending time outdoors and traveling.
Conor is a Financial Associate at Gleba & Associates, Inc., where he started in 2018. Conor has prior experience in the financial planning industry, as well as in the insurance industry. His high level of understanding insurance and financial products helps him in assessing the needs of our clients. He holds a Bachelor of Science degree in Business Administration with a concentration in Finance from the University of Detroit Mercy. You can often find Conor playing soccer or walking with his two dogs Milo, and Ellie. He is also an avid follower of the Detroit Tigers, Detroit Red Wings and his alma mater, the University of Detroit Mercy Titans.
Lorie Heitzer is our Financial Associate at Gleba & Associates, Inc., where she has been a valuable employee for more than a decade! In her current role, Lorie assists with client reviews, implements client financial planning, and handles preparation of investment paperwork. During her time with Gleba & Associates, Lorie has earned her Series 6 (Investment Company Variable Contracts Representative), 63 (Uniform Securities Agent) and Life Insurance Licenses, allowing her to move into her current role where she assists clients in both of these areas. Lorie and her husband Bill, along with their daughters Lauren and Alexandria, and sons-in-law, Andrew & Joe, enjoy golf and make it a family event whenever possible. Her tenure at Gleba & Associates speaks volumes to her passion for the firm’s family atmosphere and her dedication to our clients and their financial and insurance needs.
Terri is the Service Manager at Gleba & Associates, Inc., Joining the team in April, 2015. In her role, she handles client service requests and underwriting. Terri’s previous experience in 401(k) Retirement Plans, Payroll and Human Resource Administration is invaluable, allowing Gleba & Associates to grow and run efficiently. This is knowledge that can also assist our small business clients as they grow their businesses. Terri enjoys spending time with family, which includes her husband, Gerry and her two children, Vincent and Genna. She loves the outdoors and camping with family in their RV. Terri looks forward to continuing the high level of customer service you have come to expect from Gleba & Associates!
Michael is the Marketing Manager at Gleba & Associates, Inc., where he began in August 2017. In his position, Michael creates and develops marketing strategies to enhance the image of Gleba & Associates, and helps maximize the Client-Advisor relationship. He is also in charge of company events, seminars, and educational workshops. Michael has a Bachelor of Applied Arts Degree in Integrative Public Relations from Central Michigan University. When he is not in the office, Michael can most likely be found playing billiards, playing poker, on the tennis court, or rooting on the Utica Unicorns baseball team. Michael stays active by going to the gym and going to the dog park with his Labrador-mix, Milton. His approachable attitude, along with experience in marketing, communications, and social media, makes him a valuable asset to the Gleba & Associates team.
Moiz is our Financial Associate at Gleba & Associates, Inc., where he began in 2013 after working for Bank of America and Thomson Reuters in various financial roles. In his position, Moiz assists in the research of financial solutions in order to meet client’s needs, conducts client reviews, provides insurance quotes, offers detailed financial plans, and delivers follow-up services to our clients. Before moving to the United States in 2004, Moiz grew up in rural India, where he was raised in a family of entrepreneurs. This allowed him to quickly learn the value of financial investment. Moiz holds a Bachelor of Commerce Degree in Accounting from Gujrat University and a B.B.A. in Management and an MBA from Walsh College of Accountancy and Business Administration, where he was elected as a member of Delta Mu Delta, the International Honor Society in Business Administration in recognition of high scholastic attainment. Moiz enjoys spending time with his wife, Tasneem, son, Taha, and family. He also loves playing tennis and rebuilding computers. His expertise in the areas of banking, mortgage and taxation helps to provide our clients with distinct portfolio advice as well as overall financial direction and growth.