Astra Series Market Commentary | August 2026

Wildermuth Commentary August 2026.pdf

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The Market Takes a Summer Break

The market essentially went sideways in July as investors tried to decide which opportunities and risks deserved the most attention. The economy has continued to grow, consumers are still spending and corporate profits have remained strong. At the same time, GDP growth has slowed, interest rates remain somewhat restrictive, two major wars continue and investors are still struggling to interpret the enormous sums being spent on artificial intelligence.

The U.S. economy, according to the Commerce Department, grew at an annual rate of 1.5% during the second quarter, down from 2.1% in the first quarter and below expectations of around 2.0%. Consumer spending, which accounts for more than two-thirds of the economy, grew at a 3.2% rate after increasing only 0.5% during the previous quarter.* Weakness came from lower government spending, weaker exports and reduced investment.

Despite the slower GDP growth, a downturn remains highly unlikely. Consumers are still spending, and most economists expect growth to return to 2% or higher later this year.**

Interest rates are continuing to play an important role as well. Inflation has stayed above the Federal Reserve’s target of 2%, yet the Fed has taken a hands-off approach leaving rates unchanged under Walsh’s leadership. All this while the labor market remains relatively strong. Long-term bond yields have also been rising as traders appear to be adjusting their own expectations without waiting for the Fed to step in. A steepening yield curve is normally a signal of future growth.

Internationally, the conflict with Iran continues to alternate between negotiations and renewed fighting. Iran retains substantial influence over shipping through the Strait of Hormuz, leaving oil prices vulnerable to further disruption. Recent developments in Ukraine have been somewhat more encouraging, although a final resolution still appears distant. Both conflicts continue to add uncertainty, but neither has derailed global growth.

Investors have become accustomed to geopolitical shocks that ultimately have little effect on energy prices or economic growth. That likely helps explain why sentiment remains relatively positive despite the seriousness of the conflicts.

Artificial intelligence also remains a significant part of the economic story. Microsoft and Amazon recently reported strong results, easing fears that massive AI spending is producing little financial benefit. Their cloud businesses continue to grow, and investors responded enthusiastically with Microsoft enjoying the largest single day market-cap gain in history –– nearly half a trillion dollars –– based on its projections.

July also offered a reminder about the danger of excessive confidence. Situational Awareness, a hedge fund that made large borrowed bets on AI-related investments, reportedly lost 67% during the month. The fund was up about 270% on the year at the end of May, and still has gains of around 80% on the year, but the recent losses revealed how quickly successful trades can reverse when outlooks change and leverage is involved.

The market enters August with a reasonable economic foundation, strong corporate earnings and continued enthusiasm around technology. It also faces uncertain growth, higher borrowing costs, expensive stocks and ongoing geopolitical risks. It’s a very similar story to the rest of the year, and likely creates a reasonable platform for gains the second half of the year.

Daniel Wildermuth

Portfolio Manager, Quartz Astra Strategies

*Torry, Harriet. “U.S. Economic Growth Slowed to 1.5% in Second Quarter.” Wall Street Journal. 2026, July 30. https://www.wsj.com/economy/u-s-economic-growth-slowed-to-1-5-in-second-quarter-003c464f

**Torry, Harriet. “U.S. Economic Growth Slowed to 1.5% in Second Quarter.” Wall Street Journal. 2026, July 30. https://www.wsj.com/economy/u-s-economic-growth-slowed-to-1-5-in-second-quarter-003c464f

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DATA SOURCES

Market Data: https://www.wsj.com/market-data


INDEX DESCRIPTIONS

The Standard & Poor’s 500 Index is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market.

The NASDAQ Composite Index is a capitalization-weighted index that is comprised of all stocks listed on the National Association of Securities Dealers Automated Quotation System stock market, which includes both domestic and foreign companies.

The Dow Jones Industrial Average is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

IMPORTANT DISCLOSURES

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