The Friday Wrap — August 14, 2026: cooler inflation, and the AI names sold anyway

Two inflation prints came in cooler than expected, the S&P 500 closed at what the coverage called a record on Thursday, and the two companies that sell the picks and shovels of the AI build-out both got sold anyway. That is the week in one sentence, and the gap inside it is the interesting part.

SPY finished at 776.34, +0.40% on the week. QQQ closed 731.07, +1.11%. IWM closed 305.09, +1.17% — the best of the three, and its Friday close was the highest in our 60-day window. None of the three has a red week behind it.

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Monetary: the committee held, and three members wanted to go the other way

The July 29 FOMC left the target range at 3.50%–3.75% on a 9–3 vote. All three dissenters — Cleveland, Minneapolis and Dallas — preferred to raise by a quarter point, with inflation above the 2% target for more than five years. CNBC noted that was the first time since September 2016 that three policymakers dissented with a unified view of direction. Dissents toward tightening are a different animal from the usual split, and worth stating plainly because it sets the bar the data then had to clear.

The data cleared it in the reader's favour this week.

July CPI (Tuesday, Aug 12): +0.1% month-over-month, pulling the annual rate to 3.4% from 3.5% in June. Core rose 0.2% on the month. Shelter accounted for roughly two-thirds of the headline increase. Still above target, but the direction moved.

July PPI (Thursday, Aug 13): unchanged on the month against expectations of +0.2%, and +4.7% year-over-year against a 4.9% forecast. Core PPI +0.2% versus +0.3% expected. A 0.7% decline in goods offset a 0.2% rise in services and a 2.2% advance in construction.

What is priced has moved with it, and the coverage does not agree with itself on how far. Late-July pieces citing CME FedWatch had a September hike running anywhere from roughly 65% to 82% as energy costs bit. By August 12, FedWatch-based coverage described roughly a coin flip — about a 50.3% probability of a hold. Post-PPI reporting on Thursday described bets consolidating around a hold next month. Those are three different dates, not three contradictory readings of the same moment, and the honest summary is that the odds moved materially toward a hold across the week. We do not carry a live futures-odds feed, so that range is what the coverage says, not what we measure.

Next on the policy calendar: FOMC minutes Wednesday, August 19; the meeting itself September 16; and the Jackson Hole symposium August 27–29, with the Fed chair's keynote scheduled for Friday morning, August 28. This year's topic is "Financial Innovation: Implications for Payments and Policy."

Earnings: good demand, worse margins

The two AI-infrastructure reports of the week both produced solid numbers and both got sold. This is the layer that explains the tape.

Cisco reported Tuesday after the close: record revenue, AI orders raised past $9 billion, and non-GAAP gross margin down to 66.3% from 68.4% a year earlier — coverage tied the compression to the cost of components used in AI hardware, memory in particular. Our bars have the stock closing 123.88 Wednesday and 113.47 Thursday: −8.40% in Thursday's session, on 61.6 million shares against 14–21 million on each of the five sessions before the report. It gave up another 1.58% Friday to 111.68.

Applied Materials reported Thursday after the close. Its reaction therefore belongs to Friday's session: 534.54 to 507.18, −5.12%. Coverage framed it as solid earnings that failed to impress.

Two companies whose order books are being filled by AI demand, both marked down on the print. The demand line was not what got repriced this week; the cost of serving it was. Note that the Nasdaq still rose 1.11% on the week with its two reporting bellwethers down 8.4% and 5.1% — the index carried them, not the reverse.

On the other side, two Friday movers by our own closing math: Reddit +12.56% (158.12 → 177.975) after S&P Dow Jones Indices said it joins the S&P 500 before the August 18 open — an index event, not an earnings one — and Nu Holdings +9.44% (13.93 → 15.245) after its first quarter with net income above $1 billion. Coverage quoted roughly 10.4% and "nearly 12%" respectively; those are intraday or differently-windowed numbers. Ours are close-over-close.

Energy and geopolitics: the strait is still the story

Our WTI proxy USO rose 7.31% on the week to 126.60 — but it is down 1.99% month-to-date, and it sits 23.13% above its 200-day average. Brent was around $87 on Friday, up close to 5% on the week per the coverage, with WTI near $81. Note the gap: our futures-based ETF proxy ran hotter than Brent's weekly move. USO holds front-month contracts and is not spot crude; when the two disagree, say so rather than smoothing it.

The supply picture behind it: Lloyd's List Intelligence and CNN put Strait of Hormuz transits in the low teens per day against a normal baseline near 88, with traffic still far below pre-war levels. The IEA warned Wednesday that reopening the waterway is becoming more pressing as the world draws down oil stockpiles, and flagged the widest supply deficit in five years. Mitigating it: reduced Chinese imports, higher US production, and Gulf producers routing exports through pipelines. We report the situation; we do not forecast its resolution.

Gold is the week's cleanest disagreement. GLD closed 401.48, +0.76% on the week and +8.06% month-to-date, and 5.29% above its 50-day. Coverage of the gold rally credited the cooler CPI, central-bank buying and negative real rates. But our proxy still sits 2.64% below its own 200-day average — an 8% August has not undone the year in the ETF. Both facts are true; the rally is real and it is a recovery, not a new leg.

Elsewhere: TLT −0.87% on the week and 3.75% under its 200-day, with IEF −0.14% — the long end stayed soft in a week of cool inflation prints, which is a tension worth naming and not one we can attribute. UUP was +0.14% on the week and roughly flat on the month. VIXY (a VIX futures ETF, not spot VIX) fell 4.75% on the week and 9.17% on the month, sitting 31.42% below its 200-day.

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The tape: weekly frame

SPY sits 3.59% above its 10-week SMA (749.41) and 2.85% above its 8-week EMA (754.85). Weekly MACD histogram is positive at +1.59, weekly RSI 68.3, weekly stochastic K 95.2 / D 89.2. The extended readings are the honest note here: the weekly stochastic is pinned near the top of its range for all three indexes — IWM's is 99.7.

QQQ is the exception underneath. Its weekly MACD histogram is still negative (−1.95, line 24.87 under signal 26.82) even after a +1.11% week, because the weekly frame is still working off July.

Our historical analog (two-plus red weeks and below both the 10-week SMA and 8-week EMA) is not in effect this week — zero consecutive red weeks. Nothing to quote from it.

The tape: daily

SPY closed 776.34, −0.20% on Friday, range 775.43–778.80, closing below its open. Thursday printed the 60-day high at 779.37. The MA stack is stacked and rising: 10d 771.09, 20d 756.20, 50d 748.55, 200d 702.74 — price is 10.47% above the 200-day. The 20/50 spread is +1.02% and widening (from +0.87%). Daily MACD histogram +2.22, RSI 65.8, stochastic 94.0. ATR14 is 7.09, or 0.91% of price — that is the size of an average day right now. The 20-day range is 729.10–779.37.

QQQ closed 731.07, −0.14%, above all four averages — but its 20-day still sits below its 50-day (−1.21%, narrowing from −1.50%). Price above the averages while the short average is under the long one is what a sharp drawdown and a fast repair look like in the same picture. Daily MACD histogram is +4.36 against a weekly that is still negative. 60-day range 661.14–747.83.

IWM closed 305.09, +0.52%, on a candle that engulfed the prior body and closed above its open — the only one of the three green on Friday. It closed at the top of both its 20-day and 60-day ranges and 13.96% above its 200-day.

Breadth: who is furthest from their own high

The cleanest breadth read this week is distance-to-high. SPY closed 0.39% below its 60-day high. IWM closed 0.03% below its own — effectively at it. QQQ closed 2.24% below its 60-day high of 747.83. The index that led the month is the one still furthest from its own ceiling.

The calendar rows say why:

• SPY — Aug MTD +3.92% · July +0.03% · QTD +3.96% · YTD +14.46%
• QQQ — Aug MTD +6.26% · July −6.57% · QTD −0.72% · YTD +19.29%
• IWM — Aug MTD +4.77% · July −3.08% · QTD +1.54% · YTD +24.46%

August dispersion is 2.34 percentage points between QQQ and SPY — narrower than July's 6.60, but still enough that the index a reader owned was their month. And the zoom-out matters: QQQ's quarter is still slightly negative at −0.72% while its year is +19.29%, and IWM leads everything at +24.46% year-to-date. A repair month inside a red quarter inside a strong year is three true statements, and quoting only one of them is spin.

Open interest

Strikes and contract counts only, from the OCC book as of August 12 — it publishes with a lag, so this is not Friday's book. This is open interest, not gamma; we have no greeks.

For Monday's August 17 expiry, the largest call open interest sits at 780 (5,095 contracts), then 808 (3,849) and 807 (3,725). The largest put open interest is at 760 (4,028), then 770 (3,732) and 767 (3,121). SPY closed at 776.34 — between the 770 put line and the 780 call line. Below 760, the next put strike with comparable size is 750 (2,852).

For scale, today's expiring August 14 book was an order of magnitude larger: 135,741 calls at 780 and 123,914 at 788 against 32,790 puts at 770. That book is now off the table.

Next week's calendar

Our local audited econ list has no entries in this window and our earnings cache (13 symbols, semis only, fetched June 29) shows none scheduled — so this section comes from the research pass, not our own data. Dates move.

• Tuesday, Aug 18 — housing starts and building permits, industrial production and capacity utilisation (July). Home Depot reports before the open.
• Wednesday, Aug 19 — FOMC minutes from the July 29 meeting. Target reports.
• Thursday, Aug 20 — Walmart reports.
• Aug 27–29 — Jackson Hole symposium; the chair's keynote is Friday morning, August 28.

Three big-box retailers in three days is the consumer read of the quarter, arriving in the same week as the minutes from a meeting with three hawkish dissents.

What we don't carry

Dark-pool prints, market-on-close imbalances, spot VIX / VIX1D / VVIX, true gamma exposure or greeks, and live FOMC odds. Where a number in this letter comes from outside our own data, it is attributed. Everything priced here comes from SIP bars.

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The Coil board

Short, as always — the market is the product, the board is the closing note. As of August 14, account mode SWING:

• SPX — names on, swing mode. SPY and 8 of 11 sectors open; 272 names fully qualified.
• QQQ — names on, agile / day-trade. QQQ and 3 of 6 sectors open; 42 names fully qualified.
• Macro — risk off, defensive. Index structure broken on this book's own test; longs stood down.
• Crypto — risk off, gate closed, 0 of 2 sleeves in. BTC closed 8.9% below its 200-day gate; both sleeves in cash regardless of their own trends until the gate reopens on a UTC daily close.

Worth flagging the internal disagreement rather than hiding it: the equity books read constructive into a record week while the Macro book reads risk-off and the crypto gate is shut. Different books, different tests, and we publish all four rather than the flattering one.

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Read the board at coil.trade/scanner · own the engine — coil-v4, $49.

This letter is impersonal research and market commentary. It is not investment advice, not a recommendation, and not personalised to anyone's circumstances. No performance claim is made or implied.

Sources — prices, levels, moving averages, ranges and period returns: our own Alpaca SIP daily bars through the August 14 close; single-stock reactions cross-checked against Robinhood broker quotes and daily historicals. Open interest: OCC, as of August 12. Macro, policy, energy and calendar reporting: CNBC, Bloomberg, Axios, Kiplinger, BLS releases, TheStreet, Yahoo Finance, Lloyd's List Intelligence, CNN, Scotiabank Economics, Federal Reserve Bank of Kansas City.