The Major Markets closed mostly lower last week, breaking a three-week winning streak. The Nasdaq dropped 2.1%, the Russell 2000 declined 1.7%, and the S&P 500 fell 1.4%.

The S&P 500 Sectors highlighted the disparity in returns last week.  Health Care, Energy and Materials all saw strong gains over two percentage points while the other 8 sectors saw losses. While Information Technology wasn’t the worst performer last week, the pressure on semiconductors and AI-related companies continued as the Semiconductor Index dropped 5.5% last week.

Oil gained about 5.7% as tensions between the U.S. and Iran escalated once again. The on-again, off-again conflict with Iran saw a new development as President Trump declared the Stair of Hormuz an American Territory last week. However, transit traffic through the strait remains anemic compared to historical averages.

Meanwhile, another theme that has been running below the surface of the markets has been the rising costs of diesel prices nationwide. As the EIA highlights, Weekly US Average reached back up to $5.65, less that 30 cents from the all-time reported high back in 2022. This critical component to transportation could continue to apply inflationary pressures coming into the fall.

Looking ahead, markets will focus on the July PCE inflation report, second-quarter GDP, and several major earnings reports including NVIDIA. The week will end with Fed Chair Warsh’s comments from Jackson Hole. Market participants will be closely watching the new Fed chair for clues about the path of interest rates going forward.