MPC Morning Call — 17th August 2026: Consumer Cracks Emerge but Bull Market Rolls On; Oil Surges on Hormuz Stalemate

17 August 2026

Wall Street dipped from record highs on Friday as retail sales dropped 0.6% and consumer sentiment slumped to 51, but the S&P 500 still posted its third straight weekly gain as soft data crushed rate hike odds to just 33%. Oil surged nearly 6% for the week on the Hormuz impasse while gold hit $4,374. SPI futures point to a softer open as a monster earnings week kicks off with NAB, JB Hi-Fi, and BlueScope today.

Equities: Record Breached, Then a Breather as Consumer Data Wobbles

The S&P 500 cracked 7,800 for the first time on Thursday. Then Friday happened. Retail sales fell 0.6% against expectations for a 0.1% gain, consumer sentiment dropped to 51 from 55.2, and the market gave back a sliver, closing down 0.2% at 7,785.76. The Nasdaq slipped 0.3% to 26,729.16, and the Dow shed 0.2% to 53,732.41.

But here’s the thing: the S&P still posted its third straight weekly gain. The VIX dropped to 14.25, a six-month low. That’s not a market that’s worried. About 85% of S&P 500 companies have beaten expectations this season, with aggregate profits up 52% in Q2.

The stock-level action was mixed. AMD surged 6.5% and Sandisk added 7.4% after a bullish analyst day, but Applied Materials fell 5.1% despite a beat-and-raise. Broadcom dropped 5.9%. Reddit popped nearly 13% after being named to the S&P 500, effective today.

Index	Close	Daily	Weekly
S&P 500	7,785.76	-0.2%	+0.4%
Nasdaq Composite	26,729.16	-0.3%	+0.1%
Dow Jones	53,732.41	-0.2%	-0.6%
Russell 2000	—	+0.5%	+1.6%

Macro: Retail Sales Miss Raises the Consumer Question

We’ve been saying for a while that the “bad news is good news” trade has a shelf life. At some point, bad news becomes just bad news. Friday’s retail sales print brought that conversation back to the surface.

Retail sales dropped 0.6% in July against a consensus for a 0.1% rise. Core sales fell 0.3%. Part of that is Amazon moving Prime Day from July to June this year. But the University of Michigan sentiment reading at 51, well below the 55 consensus, suggests something more than a calendar quirk.

“It was a troubling update on the overall health of the consumer,” said Ian Lyngen at BMO Capital Markets. Consumer spending is roughly 70% of GDP, so a sustained slowdown here changes the earnings picture. But for now, the Fed is getting exactly the cover it needs to sit tight. September hike odds have fallen to 33% from 44% a week ago.

Energy, Commodities & FX: Oil Rips Higher as Hormuz Tensions Deepen

Oil was the story of the week. Brent crude finished at $88.60, up 5.9%, after the Strait of Hormuz standoff took another turn for the worse. Tanker traffic has slowed to a trickle, two more ships were attacked, and the US said it could maintain its naval blockade of Iran indefinitely. WTI rose 1.3% Friday to $82.30.

Both sides are dug in. Iran wants its assets unfrozen and hostilities ceased before reopening the strait. Washington says transit won’t be subject to tolls or conditions. Neither position leaves much room for a deal.

Asset	Price	Daily	Weekly
Brent Crude	US$88.60	+1.5%	+5.9%
Gold (Spot)	US$4,374.26	+0.5%	+0.6%
DXY (Dollar Index)	99.67	-0.25%	—
EUR/USD	$1.1564	+0.3%	—
USD/JPY	159.37	+0.1%	-1.0%

ASX Outlook & the Week Ahead

SPI futures are down 33 points, pointing to a softer open despite Wall Street’s weekly gains. This is one of the busiest weeks of the year for ASX earnings.

Today kicks off with NAB’s Q3 update, JB Hi-Fi’s FY26 results, and BlueScope’s FY26 results. Tuesday is the big one for resources with BHP and CSL reporting full-year numbers. Wednesday brings Santos, FOMC Minutes, and the Wage Price Index. Thursday is the heaviest day: Australian employment data, Walmart, Fortescue, and Goodman Group. James Hardie rounds things out on Friday with Flash PMIs.