Weekly Market Commentary July 27, 2026
Week in Review
Economic data released during the week pointed to continued economic expansion, supported by a resilient labor market and improving business activity, though inflationary pressures and housing affordability challenges remained important areas of focus.
Labor market data continued to highlight underlying strength. Initial jobless claims fell to 187,000, down from 209,000 the prior week, marking the lowest level in decades. The decline reinforced the view that labor market conditions remain healthy. Continued labor market resilience should help support consumer spending and broader economic activity.
Business activity strengthened during the month. Preliminary July Services Purchasing Managers’ Index (PMI) data showed Composite PMI rising to 53.6 from 51.9 in June, reaching its highest level in eight months. Services activity remained the primary driver of growth, while July Manufacturing PMI eased slightly from the prior month but remained in expansion territory with a reading of 53.8. The data suggested the economy entered the second half of the year with solid momentum, supported by continued demand across much of the private sector.
Energy market data provided a mixed signal on inflation pressures. U.S. commercial crude oil inventories increased by 2.0 million barrels during the week, reversing expectations for a decline. While higher inventory levels may help reduce upward pressure on energy prices in the near term, overall stockpiles remain below historical averages, indicating supply conditions remain relatively tight.
Housing data suggested conditions remain challenged but stable. New home sales increased 1.6% in June to an annualized pace of 628,000 units, improving from 618,000 in May. This increase suggests housing demand remains resilient despite elevated mortgage rates, providing evidence that buyers continue to adapt to higher borrowing costs. While activity remains below the stronger pace seen in recent years, the report indicated the housing market may be gradually finding footing.
Overall, the week's data reflected an economy that continues to expand at a moderate pace. Strong labor market conditions and improving business activity remain supportive of growth, while inflation and housing affordability continue to present challenges that policymakers and investors will monitor closely.
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