Inflation Heats Up as Commodities Rally and Stocks Slide (August 17 – 21, 2026, Recap)

Overview

Last week’s market activity was shaped by key inflation, employment, and energy data from Canada, the UK, Australia, and the United States. Rising inflation pressures, mixed labor-market signals, and changing oil inventories influenced major currency pairs, while commodities posted strong gains. At the same time, major U.S. stock indices ended the week lower, with earnings from Baidu, Walmart, and Alibaba also drawing investor attention.

Major Economic Indicators and Events in Review

Monday, August 17

15:30 – Canada: CPI m/m (CAD)

Canada’s inflation rate rose to 3.0% in July 2026, up from 2.8% in June. Much of the increase came from higher gasoline prices, travel costs, and airfares.

Gasoline prices were 25.7% higher than a year earlier, partly because conflict in the Middle East disrupted major shipping routes and pushed up fuel costs. Travel tours rose 15.2%, while air transportation increased 12.0%.

Grocery prices were still rising faster than overall inflation, but the pace slowed to 3.1% from 3.9% in June. Fresh vegetables, chicken, and cereal products saw slower price growth, while fresh fruit became more expensive.

Overall, consumer prices rose 0.5% from June to July, while shelter costs were 1.3% higher than a year earlier.

USD/CAD edged down 0.01% on the day.

Wednesday, August 19

09:00 am – UK: CPI y/y (GBP)

UK inflation rose in July 2026, with the Consumer Prices Index increasing 2.9% from a year earlier, up from 2.6% in June. Prices rose 0.3% during the month. Housing and household costs, particularly gas and electricity, were the main drivers of higher inflation, while lower transport costs partly offset the increase. Food inflation slowed to 1.3%, while core inflation remained unchanged at 2.6%.

GBP/USD rose 0.55% on the day.

17:30 – USA: Crude Oil Inventories (USD)

US oil refineries increased activity in the week ending August 14, operating at 97.2% of capacity and processing 17.4 million barrels of crude oil per day. Crude oil imports fell, while commercial crude inventories rose by 4.4 million barrels to 428.8 million. Gasoline stocks increased slightly but remained below typical seasonal levels. At the same time, distillate inventories fell and were 13% below the five-year average. Overall petroleum inventories rose by 8.8 million barrels. Meanwhile, US fuel demand remained weaker than a year earlier, with gasoline, distillate and jet fuel consumption all down over the latest four-week period.

EUR/USD edged 0.89% higher on the day.

Thursday, August 20

04:30 am – Australia: Employment Change (AUD)

Australia’s labor market weakened slightly in July 2026. Employment fell by 15,800 people to 14.8 million, while the unemployment rate edged up to 4.5%. Full-time employment increased, but this was more than offset by a drop in part-time jobs. The share of the population with a job fell to 63.9%, and the participation rate declined to 66.9%. Hours worked also decreased. However, the underemployment rate improved slightly to 6.4%, while youth unemployment fell to 10.4%.

AUD/USD fell 0.18% on the day.

15:30 – USA: Unemployment Claims (USD)

US jobless claims fell slightly in the week ending August 15, with 206,000 people filing for unemployment benefits for the first time, down 6,000 from the previous week. However, the four-week average increased, suggesting claims have been somewhat higher recently. Continuing unemployment claims rose by 18,000 to 1.8 million in the week ending August 8, while the insured unemployment rate remained unchanged at 1.2%.

EUR/USD edged 0.013% higher on the day.

Commodities

1. Crude Oil

1. Crude oil prices rose 5.15% over the past week

2. Brent Oil

1. Brent was up 5.38% compared to the previous week

3. Gold

1. The precious metal Gold (XAUUSD) concluded the week on Friday with 5.17% weekly gains

4. Silver

1. XAGUSD increased by 6.62% from last week

Stock Market

1. S&P 500 fell 1.43%

2. DJIA was down 0.83%

3. NASDAQ 100 dropped 2.49%

Top Gainers

1. RF Acquisition Corp II (RFAI) 422.99%

2. IP Strategy Holdings, Inc. (IPST) 338.64%

3. Wetour Robotics Limited (WETO) 216.42%

Top Losers

1. Lucas GC Limited (LGCL) -96.07%

2. Zenta Group Company Limited (ZTG) -90.30%

3. EyePoint, Inc. (EYPT) -63.93%

Company Earnings (August 17 – 21)

Tuesday, August 18: BIDU (Baidu, Inc.)

Thursday, August 20: WMT (Walmart Inc.)

Thursday, August 20: BABA (Alibaba Group Holding Limited)

Baidu’s AI businesses showed strong momentum, with AI Cloud Infra revenue up 50% and GPU cloud revenue surging 283%, helping improve margins. However, total revenue fell 4% to CNY 31.3 billion as advertising remained weak while Baidu prioritized AI search improvements over short-term monetization. The company is continuing heavy investment in its ERNIE AI models. Meanwhile, Apollo Go completed about 1 million driverless rides and expanded into international markets.

BIDU shares fell 10.09% over the past week.

Walmart raised its full-year outlook, expecting sales to grow 4%-5% and adjusted EPS of $2.80-$2.87. Growth remained strong across eCommerce, advertising, and membership businesses. However, profit growth may slow in the near term as Walmart reinvests tariff refunds into lower prices, while higher fuel costs and drug-pricing regulations add pressure.

WMT shares fell 10.04% during the past week.

Alibaba Group reported Q3 2026 earnings on March 31, 2026, with earnings per share of $0.01 and quarterly revenue of $35.30 billion. The company’s trailing EPS stands at $6.09, while its P/E ratio is 28.93. Analysts expect earnings to increase by about 42% next year, with EPS projected to rise from $6.27 to $8.92.

BABA shares were down 3.61% over the past week.

Conclusion

Overall, the week reflected cautious market sentiment as investors weighed rising inflation, mixed labor-market data, and shifting energy conditions. Commodities recorded strong gains, while major U.S. stock indices moved lower and several high-profile earnings reports added to volatility. Looking ahead, markets are likely to remain sensitive to incoming economic data, inflation trends, and expectations for future central bank policy.