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* FIEND'S SUPERBEAR MARKET REPORT *

* August 26, 2026 *

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* e-mail: fiendbear@fiendbear.com *

* web address: http://www.fiendbear.com *

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Fiend Commentary
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The Quiet Before the Fall?

Tuesday was calm, but it was not especially reassuring.

The Dow and S&P 500 each gained about 0.3%, while the Nasdaq rose 0.7%. Oil dropped sharply, long-term Treasury yields eased, and technology stocks recovered ahead of Nvidia’s earnings report. Trading volume, however, was noticeably below its recent average, suggesting that investors were waiting rather than enthusiastically committing new money.

Nothing broke. Nothing was fixed either.

The market received a one-day reprieve from several pressures that have been building throughout the summer. Oil backed away from $90, the 10-year Treasury yield fell toward 4.64%, and the 30-year moved closer to 5.2%. Those are better levels than last week’s near-20-year highs, but “lower” should not be confused with “low.”

The calm looks more like a holding pattern before a very crowded calendar.

Another Oil Peace Rumor

Oil fell because Iran resumed discussions with Oman over management of the Strait of Hormuz. Once again, markets treated the existence of talks as evidence that an agreement must be close.

Yet Iran simultaneously repeated that the Strait would remain restricted until its conditions are met. No final terms were announced, shipping remains severely impaired, and the United States and Iran still appear to disagree over the central issue of who controls passage through the waterway.

This is the same pattern that has repeated for months:

Oil rises as fighting or threats intensify.

A mediator announces new talks.

Oil falls before anything is signed.

The negotiations stall.

Then the cycle begins again.

Brent dropping into the upper $80s and WTI moving toward the low $80s provide welcome relief from the recent spike. They do not refill the Strategic Petroleum Reserve, restore normal tanker traffic or settle the war.

The oil market continues to price optimism much faster than physical conditions improve.

That may be enough to suppress inflation fears for another week. It is not a green light for the fall.

The Bond Slide Paused, Not Ended

Tuesday’s decline in Treasury yields also looked more dramatic because of how far they had recently risen.

The 10-year yield fell roughly 6.5 basis points Tuesday, its largest one-day retreat in about two months, while the 30-year moved back toward 5.2%. The bond market received some relief from lower oil and from Treasury’s expanded buyback plans.

But the long bond remains close to levels not seen since 2007.

A 30-year yield around 5.2% still means expensive mortgages, higher corporate refinancing costs, greater pressure on private credit and a rapidly increasing federal interest bill. The 10-year near 4.6%–4.7% remains high enough to restrain housing and challenge extreme stock valuations.

Treasury can improve liquidity by buying older securities. It cannot solve a solvency problem created by $40 trillion of debt and continuing deficits. The temporary bond rally may show that Washington can influence the market for a day. It does not show that investors are willing to finance the government cheaply for thirty years.

The real test will come when oil rises again or the next inflation report disappoints. If long yields quickly return to their highs, Tuesday’s relief will look like another pause rather than a turn.

The Quiet Data Are Not Necessarily Good Data

There was no single economic report Tuesday large enough to dominate the market, but the smaller signals were not especially encouraging.

Consumer confidence fell to its lowest level in seven months. Dick’s Sporting Goods plunged more than 30% after cutting its annual forecasts. Those developments do not prove the economy is entering recession, but they fit the broader pattern of consumers becoming more selective as gasoline, food, insurance, credit cards and auto loans consume more of household income.

That kind of deterioration usually appears gradually. One retailer warns about footwear demand. Another reports softer traffic. Consumer confidence slips. Hiring slows. Participation declines. None of the reports creates panic by itself, but the collection begins to matter.

Wall Street still interprets most economic weakness as a reason for the Fed not to raise rates.

That trade works until weaker consumers begin reducing corporate earnings.

For now, the market believes it can have both: soft enough growth to restrain Kevin Warsh and strong enough profits to keep stocks near records.

September and October may determine whether that combination is real or merely another Wall Street hope.

The Calendar Is About to Get Loud

Wednesday alone brings several significant tests.

The government will release the second estimate of second-quarter GDP, along with corporate profits, personal income, consumer spending and the July PCE inflation indexes. After the market closes, Nvidia will report earnings that may determine whether the AI rally can continue supporting the major averages.

Nvidia is no longer merely another large company reporting results. It has become a referendum on the entire AI capital-spending cycle. The stock market now expects enormous growth as a prerequisite rather than a pleasant surprise. A good report may produce only temporary relief. A disappointing forecast could revive questions about stretched semiconductor valuations, circular financing and whether hyperscalers can continue spending hundreds of billions without damaging free cash flow.

Then comes Kevin Warsh’s Jackson Hole address Friday.

The Fed chair must explain how he plans to restore 2% inflation while employment weakens, the dollar struggles and long-term bond yields remain historically high. He must also address markets increasingly influenced by Treasury’s bond-buyback policy without appearing subordinate to either Scott Bessent or Donald Trump.

A hawkish speech could revive September rate-hike expectations and pressure stocks and metals.

A dovish speech might lift stocks initially but weaken the dollar and push long yields higher if investors conclude that inflation will remain tolerated.

A vague speech could be worse than either. Markets may decide that the Fed has no clear plan beyond waiting for oil and the economy to solve the problem.

September Has Little Margin for Error

The September 15–16 Fed meeting will arrive after another employment report and another round of inflation data.

By then, current rate-hike probabilities could look completely different. One weak payroll report could remove a September increase almost entirely. One hot CPI or PPI report could revive it. Another oil spike could change the calculation in a matter of hours.

The stock market is entering that period near record levels, dependent on a relatively small number of technology leaders and supported by the assumption that the Fed will remain on hold.

That leaves little room for disappointment.

A weak economy is currently considered bullish because it restrains the Fed. Persistent inflation is considered manageable because it can be blamed on temporary oil or tariff effects. High bond yields are tolerated because stocks have not yet broken. The Middle East war is treated as background noise because every escalation has eventually produced another negotiation.

Each explanation works separately.

The difficulty comes if several problems arrive together.

Suppose employment weakens while core inflation remains elevated. The Fed would have no comfortable move.

Suppose Nvidia disappoints while the 10-year pushes toward 5%. The technology leaders carrying the market would face both earnings and valuation pressure.

Suppose the Strait talks fail again while global oil reserves remain depleted. Another energy spike would arrive just as consumers and businesses enter the fall with less financial cushion.

None of these outcomes is certain. The market may move quietly through September and October, and the major averages may continue setting records.

But Tuesday’s calm was not evidence that the risks have disappeared. It reflected falling oil, a temporary retreat in yields and investors waiting for the next set of catalysts.

The quiet may continue for another day.

The calendar suggests it will not continue for another two months.

August is ending with the markets holding together.

September and October will test what is actually holding them up.

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