Today’s Stock Market in 2-Minutes

By Alex Financials

Published: August 13, 2026

U.S. stocks head into Thursday with investors balancing three major forces: softer-than-expected producer inflation, signs of a slightly weaker labor market, and renewed enthusiasm for artificial intelligence infrastructure. The latest data give the Federal Reserve some room to remain patient, but elevated inflation and higher energy costs are keeping a September rate decision firmly in focus.

Meanwhile, strong results from AI infrastructure companies such as CoreWeave ($CRWV) and Super Micro Computer ($SMCI) are extending a powerful technology trade, while Cisco ($CSCO) is showing that even strong AI-related growth may not be enough to satisfy investors when expectations are extremely high.

 

U.S. Producer Prices Come in Below Expectations

The biggest economic development this morning is the July Producer Price Index from the Bureau of Labor Statistics.

Producer prices were unchanged in July, following a 0.1% decline in June. Economists had expected a modest increase. On a year-over-year basis, final demand prices rose 4.7%, down sharply from the 5.5% annual increase recorded in June. (Bureau of Labor Statistics)

The details were also constructive in several areas. Final-demand goods prices fell 0.7%, helped by a 3.1% decline in energy prices. Gasoline prices dropped 5.7%, while food prices fell 0.9%. Final-demand services increased 0.2%. (Bureau of Labor Statistics)

The core measures were somewhat firmer. Prices excluding food, energy and trade services increased 0.4% in July, compared with a 0.1% increase in June. On an annual basis, that measure was up 4.7%. (Bureau of Labor Statistics)

For investors, the headline message is still favorable: the broader wholesale inflation picture did not accelerate in July. That could reduce some of the pressure on the Federal Reserve, particularly after Wednesday’s consumer inflation report also failed to deliver a major upside surprise.

Jobless Claims Point to a Slightly Cooler Labor Market

Weekly unemployment claims also offered investors another piece of the economic puzzle.

Initial jobless claims for the week ended August 8 came in at 209,000, above the roughly 204,000 level expected by markets and up from 199,000 previously. Continuing claims were 1.777 million, below expectations and the prior reading. (Reddit)

The numbers do not point to a sudden deterioration in employment. Instead, they reinforce the idea of a labor market that is gradually losing some momentum while remaining relatively healthy.

That distinction matters for stocks. A modest cooling in employment can be positive for equities when it reduces inflation pressure and makes future monetary easing more plausible. A sharp deterioration, however, would raise concerns about corporate earnings and consumer demand.

For now, Thursday’s data look more like a soft-landing signal than a recession warning.

The Fed Has Less Inflation Pressure, But It Is Not Ready to Relax

The inflation data arrive against a complicated Federal Reserve backdrop.

At its July 29 meeting, the Fed held its benchmark interest-rate target at 3.50% to 3.75% in a 9-3 vote. Three officials, Beth Hammack, Neel Kashkari and Lorie Logan, preferred a quarter-point rate increase. The Fed said inflation remained elevated relative to its 2% goal and specifically cited supply shocks, including energy prices. (Federal Reserve)

That makes today’s PPI report important.

A flat monthly PPI reading does not eliminate inflation concerns, particularly because services and some underlying categories remain firm. But it does make the case for an immediate additional tightening of monetary policy somewhat harder to justify.

Markets are therefore likely to focus heavily on upcoming inflation and employment data before the Fed’s September meeting.

For growth stocks, the direction of Treasury yields could be just as important as the Fed itself. Lower yields can support high-valuation technology companies by reducing the discount rate applied to future earnings. Higher yields can have the opposite effect.

AI Infrastructure Stocks Are Back in the Spotlight

The other major story driving markets is the renewed strength of the AI infrastructure trade.

On Wednesday, August 12, the S&P 500 closed at 7,748.50, only modestly below its recent record, while the Nasdaq Composite rose 0.54% to 26,588.49. The Dow slipped 0.04%. The rally was supported by strong results from several companies tied to AI computing infrastructure. (Reddit)

CoreWeave ($CRWV) was one of the biggest catalysts. The cloud infrastructure company reported second-quarter revenue of approximately $2.58 billion, more than double a year earlier and above Wall Street expectations. CoreWeave also raised its full-year revenue outlook to $12.4 billion to $13.2 billion and projected third-quarter revenue of $3.45 billion to $3.6 billion. (Investopedia)

The company’s backlog stood at roughly $104 billion, while management said it had already added about $25 billion of additional commitments early in the third quarter. Capital expenditures are expected to reach $35 billion to $39 billion this year, highlighting just how capital-intensive the AI infrastructure buildout has become. (Investopedia)

Super Micro Computer ($SMCI) is delivering a similar message from the server side of the industry. The company had previously disclosed record quarterly orders exceeding $60 billion, supporting the broader view that demand for AI data center infrastructure remains substantial. (Supermicro)

The significance goes beyond two individual stocks. Investors are increasingly looking for evidence that the AI boom is spreading beyond chip designers and hyperscalers into servers, networking, storage, cooling and data center infrastructure.

Cisco Shows the Problem With High Expectations

Cisco ($CSCO) is another important AI infrastructure name, but its market reaction highlights the challenge facing companies in this environment.

Cisco has been reporting strong AI-related demand. In its prior quarter, the company said AI infrastructure orders from hyperscale customers were driving a significant increase in expectations for its fiscal 2026 AI business, with expected AI-related orders raised to $9 billion from $5 billion. (Cisco Investor Relations)

Yet the stock came under pressure following its latest results despite another strong headline performance. That reaction illustrates a crucial market theme in 2026: beating estimates is not necessarily enough when expectations are already extremely high.

Investors increasingly want to know how quickly AI revenue converts into sustainable margins, free cash flow and long-term earnings growth.

This could become an important theme for other infrastructure companies as the AI spending cycle matures.

Applied Materials Earnings Could Set the Tone for Semiconductor Stocks

After Thursday’s closing bell, attention will turn to Applied Materials ($AMAT), one of the world’s largest semiconductor equipment companies.

Applied Materials is scheduled to report fiscal third-quarter results after the market closes, with analysts expecting roughly $3.38 to $3.40 in earnings per share and about $9 billion in revenue. (TipRanks)

The report could have implications well beyond $AMAT.

Investors will be watching for commentary on semiconductor manufacturing capacity, AI-related chip demand, capital spending by leading chipmakers and the effect of global trade restrictions on equipment demand.

With semiconductor stocks already receiving a boost from the latest AI infrastructure results, stronger-than-expected guidance from Applied Materials could provide another catalyst for the sector.

Companies connected to the semiconductor equipment and infrastructure ecosystem, including NVIDIA ($NVDA), Micron Technology ($MU), SanDisk ($SNDK) and other chip and storage names, could also respond to the tone of management commentary.

What Investors Should Watch Next

The market enters the second half of the week with a relatively favorable macro setup, but several risks remain.

The first is interest rates. Even with today’s softer PPI number, the Fed’s July decision showed that policymakers are divided and that some officials want tighter policy. (Federal Reserve)

The second is energy. Lower gasoline and energy prices helped today’s PPI report, but geopolitical developments in the Middle East remain an important source of inflation risk. The Fed itself has cited energy-related supply shocks as one reason inflation remains elevated. (Federal Reserve)

The third is valuation. The S&P 500 is trading close to record territory while AI-linked stocks have regained momentum. That creates a favorable environment when earnings continue to beat expectations, but it can also make markets more sensitive to disappointments.

Friday’s retail sales report will provide the next major test of the U.S. economy and could help determine whether investors view current conditions as a sustainable soft landing or an economy beginning to lose momentum. (The Briefing)

Bottom Line: Inflation Is Helping, But Earnings Still Matter Most

The August 13 market setup is increasingly centered on a simple question: Can earnings growth keep justifying elevated stock market valuations while inflation cools enough to prevent the Fed from tightening further?

Today’s PPI report provides an encouraging answer on inflation. Wholesale prices were flat in July, annual producer inflation slowed to 4.7%, and weekly jobless claims edged higher. (Bureau of Labor Statistics)

At the same time, the AI infrastructure story remains powerful. CoreWeave ($CRWV) and Super Micro Computer ($SMCI) are showing strong demand, while Cisco ($CSCO) demonstrates that investors are becoming increasingly demanding about profitability and future growth.

The next major catalyst is Applied Materials ($AMAT), followed by Friday’s retail sales report.

For now, the market remains caught between two powerful forces: improving inflation data and exceptionally high expectations for technology and AI earnings. That tension is likely to remain the defining theme for U.S. stocks as August continues.

Sources

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