Stocks took a breather in August as the S&P 500 fell 1.6%, the Dow Jones Industrial Average slipped 2.0%, and the NASDAQ ended 2.1% lower. It was a disappointing month globally–EAFE sank 3.8% in August and Emerging Markets tumbled 6.1%. Nonetheless, August didn’t subtract too much from the upbeat year-to-date performance of major US indices. The NASDAQ is still up 34.1% in 2023, the S&P 500 is 17.4% higher, and the Dow 4.8%.

Energy was the only US stock sector that posted a positive return in August, up 1.6%. Utilities was the laggard of the remaining ten sectors, down 6.1%.


Unemployment rose by three-tenths in August to 3.8%, even as the labor force participation rate grew. Inflation crept back up above 3%, while Core Inflation fell to 4.65%. The Median Sales Price of Existing Homes leveled off this month, and mortgage rates reached 20-year highs. Gas prices rose in August even as the price of Brent and WTI crude oil traveled in opposite directions this month.


US Treasury yields were largely flat in August, echoing the rather muted performance from equities. The 3-Month Treasury Bill remains the highest-yielding US treasury instrument at 5.56%, and the 10-Year is the lowest at 4.09%. In global fixed income, the yield on Japan’s 10 Year Government Bond rose by 5 basis points to 0.66%.


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