The Prime Daily: 17 August 2026

Authored By Prime Research | Last Modified: Aug 17, 2026 10:03 AM IST

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Wall Street Ride Inflation Relief to Third Straight Weekly Gain

US Equities hovered near record highs through the last week, buoyed by favourable inflation data and sustained AI-related spending, before easing on Friday as consumer economic indicators weakened. The S&P 500 rose 0.4% to 7,785, and the Nasdaq Composite edged up 0.1% to 26,729, while the Dow Jones Industrial Average slipped 0.6% to 53,732.

Softer-than-expected CPI data eased rate-hike fears and modestly pulled down 10-year Treasury yields, supporting investor sentiment — though Fed officials continued to flag inflation risks. A sharp drop in July retail sales and a weaker consumer sentiment reading later prompted some profit-taking, dragging the Dow into the red while the Nasdaq finished nearly flat.

The Consumer Price Index held at a 3.4% annual rate in July, and producer price inflation was little changed month on month. Concerns over longer-term inflationary pressure pushed the 30-year Treasury yield back to its highest level since 2007, matching the peak reached two weeks earlier.

S&P 500 companies were on pace for second-quarter revenue growth of 15% — the fastest since Q4 2021, and earnings growth exceeding 50%, the strongest since Q2 2021. Oil prices rose for the week as tensions in the Middle East and around the Strait of Hormuz continued to drive energy markets.

Looking ahead, global investors will watch whether the Fed holds its neutral stance, how geopolitical tensions affect energy prices, and whether consumer names can justify current valuations. The S&P 500’s third straight weekly gain points to underlying bullish sentiment despite Friday’s pullback from record highs.

Indian markets snapped their two-week winning streak last week, closing modestly lower as elevated crude prices and Middle East geopolitical friction outweighed steady domestic institutional buying and Q1 FY27 earnings support.

The Nifty closed at 24,366, down ~0.8% for the week, pressured by profit-booking at elevated levels, Brent crude firming toward $90/bbl, and mixed global risk sentiment — even as the RBI’s policy hold and resilient domestic institutional flows offered support.

Late-week profit-booking in global risk assets further capped upside. Broader markets were mixed: the BSE 150 Mid-Cap index gained 0.2%, while the BSE 250 Small-Cap index fell 0.3%.

The RBI’s MPC unanimously held the repo rate at 5.25% for a fifth straight meeting, retaining its neutral stance, while upgrading the FY27 real GDP growth forecast to 6.7% and trimming the CPI inflation projection to 5.0%. This “higher growth, lower inflation” mix briefly lifted rate-sensitive segments but failed to sustain momentum amid four consecutive daily declines into Friday.

Sectorally, Telecom led gainers, up over 3% on the back of Bharti Airtel’s strong ARPU trajectory and operational momentum, followed by Media (+2.2%), Defence (+1.7%), and Consumer Durables and Realty (+1.3% each). Metals and commodities underperformed sharply on global commodity volatility and profit-taking, with Metal down ~1.9% and Cement down 2.9%. FMCG (-1.7%), Housing Finance (-1.6%), and Auto (-1.5%) also declined.

FIIs registered modest net inflows of ~Rs 1,228 crore in the cash segment, with strong early-week buying offset by selective mid-week selling. DIIs sustained robust buying, with net inflows of ~Rs 9,285 crore.

The Nifty faces resistance at 24,600–24,770 and support at 24,200, with investors awaiting clearer cues from global markets.

Indian equities are set for a mildly negative open in the absence of any strong catalyst.

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If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.
Please Note: The information shared is intended solely for informational purposes and does not make any investment recommendations.
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