Summer round-tripping: August monthly roundup

In like a lion and out like a lamb. Weather-watchers use this saying about March. Stock traders might consider August 2026 in a similar vein. Global stocks rallied in August as strong corporate earnings and renewed strength in the AI outlook provided reassurance to investors despite the tense geopolitical backdrop and benchmark government bond yields hitting fresh cycle highs. Nvidia posted bumper earnings to underpin confidence in durable AI demand and returns on investment, while a push higher in bond yields was a worry for longer duration equities. Treasury Secretary Scott Bessent’s announcement to prop up the long end of the bond market with additional buybacks provided only a very brief respite for beleaguered bond investors.

Market Roundup

The month kicked off on a strong note with risk assets rising sharply as markets dialled down bets for the Federal Reserve to raise rates. The yield curve steepened as a result with inflation expectations ticking up. But the month finished with the market seeing the Fed taking on a more hawkish policy stance, after Fed chair Kevin Warsh signalled there is “more work to do” on inflation. US 30yr Treasury yields hit 5.34% in August for the highest since 2007, while the 10yr rose to 4.76%, its highest since January 2025.

It was a month marked by sharp gains at the outset for stocks before a shift at the very end of the month as bond yields shot higher. The FTSE 100 was broadly flat, declining –0.4% for the month, while the FTSE 250 managed to rally +4%.

The S&P 500 rose +2.7% in August to round trip a choppy month. Gains were made early in the month and just about held, though September is set up to be choppy once more. The Dow Jones industrial average rose +1% for its fifth consecutive monthly advance; remarkably its 15th positive month in the last 16. The Nasdaq recorded its first monthly rally since May, rising +3.9%, respectively. Both the S&P 500 and Dow reached all-time highs earlier in August.

Across SPX sectors Energy led the pack with a +7.0% surge, followed by Information Technology (+6.2%) and Materials (+6.0%). IT made up almost three-quarters of the overall index’s advance thanks to large market cap weightings. Utilities and Industrials declined as they have back some of the positive rotation we’d seen earlier this year. As tech regained momentum in August software stocks were notable for their bounce following the drawdown into April’s lows.

Moderna was the best-performing stock on the S&P 500 with a gain of +156% on news of its breakthrough melanoma cancer vaccine trial. Palantir rallied over +51% to take the second spot, while the next three best-performing stocks were Veeva Systems, Salesforce (both on strong results and declining worries about the impact of AI on software), and Paramount Skydance.

Commodities rallied though oil prices remained broadly rangebound until breaking out higher at the start of September. Gold had a good month as the yield curve steepened with longer-dated bonds selling off while the front-end remained reasonably well anchored. This dynamic started to shift after the Jackson Hole event, while a sudden re-escalation in the US-Iran conflict sparked fresh worries about inflation from higher energy costs and disrupted supply chains. The peak for spot gold on 25 August marked its best since the middle of May before trading down –8% in the following week after an ascent of +9% for the month of August.

Top performing FTSE stocks & funds

A 55% rally for Oxford Nanopore Technologies took it to the top of the FTSE 250. Hochschild Mining (+55%) and Pan African Resources (+48%) also delivered strong returns as the rally in gold and silver prices boosted precious metals miners.

The gain for gold +9% and silver +15% ensured Endeavour Mining and Fresnillo were the top risers on the blue-chip FTSE 100 index. Among other basic resources names, record high copper prices hit last month helped the likes of Rio Tinto and Anglo American. Computacenter was the third-best riser last month as it extended gains following the upgrade to profits in July.

The gains in gold and silver ensured that the best-performing funds were dominated by precious metals strategies. The top gainers in the Saxo universe included the UBS Solactive US Listed Gold & Silver Miners UCITS ETF, iShares Gold Producers UCITS ETF, Ninety One Global Gold, BGF World Gold A2, VanEck Gold Miners ETF, Global X Silver Miners ETF and the VanEck S&P Global Mining UCITS ETF.