Asset Management
08/17/2026 Market Strategy
August 17, 2026
Key Takeaways
Continued strong results reported for Q2 earnings season along with economic data that showed inflation surprising to the downside, lent support for the Fed to remain “on hold.” Stocks rallied in response. The S&P 400 (midcaps) and Russell 2000 (small caps) closed on Friday at new record highs. The S&P 500 recorded a new high on Thursday before easing back on Friday.
In our view, intermediate- and longer-term investors should not be surprised if with the VIX currently at its lower levels that any negative news item could create a spate of indigestion for the markets.
With yet another S&P 500 reporting season that has seen earnings growth surprise substantially to the upside, it isn’t any wonder that bears, the highly leveraged, short-term traders, the nervous and forever skeptics of market progress are pumping air into arguments predicting stormy weather ahead while seeking out catalysts to justify taking profits on assets run up during the latest bull market.
In our view, intermediate- and longer-term investors should not be surprised if with the VIX currently at its lower levels that any negative news item could create a spate of indigestion for the markets. While the long-term challenged memory of the markets makes every piece of news the next coming of a bear market, the reality is that resilient fundamentals form a series of offsets that can and have recently countered a series of negative stories.
We’re not suggesting wearing rose colored glasses or thinking that trees grow to the sky but rather for one to consider that the economic and corporate fundamentals that underpin revenue growth and earnings growth along with resilience in job growth and consumer spending could resurge.
Not-withstanding some period where indicators seem to veer toward a patch of slowing whether in jobs growth or consumer spending -- responsible monetary policy, experienced corporate managers, and innovation that can lead to substantial increases in productivity could well serve investors practicing prudent diversification and patience.
In our view structural changes making monetary policy relatively quick to respond to risk and even crisis along with the changing structures of innovation, demographics, consumer appetites and needs along with drivers of job postings which have proven successful (albeit to different degrees) have more often than not in our view successfully countered bearish prognostication for disaster pointing to greater opportunity than risk over the time line of the markets since the beginning of the twenty-first century.
The bond market in our view is presently doing the “heavy lifting” in rates unintentionally allowing the Federal Reserve Board to keep its benchmark rate range in a band of 3.25%- 3.50% in place (and close to where it has been for some time) while remaining sensitive to its dual mandate guarding against untoward levels of inflation while keeping policy in favor of sustainable employment growth.
Our view continues to suggest intermediate- to long-term investors in both the stock and bond markets (as well as in markets belonging to other asset classes) should avoid blindly buying the dips on market volatility but rather seek out the babies that get thrown out with the bathwater in market declines.
Diversification remains key in our view to delivering positive results in an environment that remains highly transitional stateside and internationally.
An overhanging risk to the markets remains the hostilities between the US and Iran that remain a threat to stabilizing inflation and restoring sustainable economic growth globally.
Uncertainty in our view is always part and parcel of the markets just as in life. The key to navigate through it in our view is to position assets with diversification, patience and right-sized expectations.
Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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