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A couple of weeks ago we wrote an article about the sideways market that the S&P500 was in at the time. In that article we pointed out that while the market had been moving sideways for three months, the actual companies which the market represented had been continuing to grow and develop. We anticipated that the market would break to the upside out of that flag formation and that when it did it would have to catch up the growth of the previous three months. Consider the chart:

The chart shows how the S&P was moving sideways between the previous record high of 7609 made on the 6^th of June 2026 and the low of 7267 made on the 10^th of June 2026. Then on the 4^th of August 2026 the S&P broke strongly to the upside and made a series of new record highs – just as we expected.

From a fundamental perspective, lower-than-expected inflation and a slower level of job creation gave the market hope that the Federal Reserve Bank would not raise interest rates again at the next meeting of the monetary policy committee (MPC) on the 15^th and the 16^th September 2026. The consumer price index (CPI) fell to 3,4% in July 2026 from June’s figure of 3,5%. The drop gave investors hope that the worst of the effects of the Iran fuel price hike were behind and that inflation was again moving down.

The producer price inflation figure for the year to the 31^st of July 2026 was also encouraging at 4,7% - significantly lower than June’s figure of 5,5% and reflecting the drop-off in the oil price. We believe that interest rates in America will probably remain unchanged until the end of this year.

The stalemate in Trump’s war and its impact on world oil prices appears to have stabilized with North Sea Brent Oil hovering roughly $15 per barrel above where it was before the war began. While developments in the war are still a factor, investors’ attention is back to focusing on the figures coming out of the companies which make up the S&P, especially the so-called Magnificent Seven.

In Q2 2026, Apple was the hero with earnings per share (EPS) up an impressive 29% year-on-year, followed by Microsoft’s 32% gain. Alphabet, Amazon, Meta, and Tesla delivered solid revenue, above forecast, but this was heavily counterbalanced by massive capital expenditure increases mainly for artificial intelligence infrastructure.

Nvidia is reporting its results for the second quarter in a few days’ time on the 26^th of August 2026. Wall Street is anticipating another blowout quarter with analysts looking for exponential growth fuelled by the relentless demand for artificial intelligence infrastructure.

What is also clear to us is that Americans are expecting Trump and the Republicans to perform very badly in the coming November mid-term elections, almost certainly losing the House of Representatives and possibly even the Senate. If this happens, it will make Trump into a “lame dog” president, unable to pass any legislation against Democrat opposition. There is also now the clear possibility that he could be forced to resign as a result of increasingly poor health or because he is impeached.

Whatever happens it is clear that his influence over the stock market is declining rapidly. The market has lost interest in his interminable erratic announcements on Truth Social and is instead caught up in the excitement over the productivity benefits of new technologies.

We expect that the S&P will continue to climb to further new record highs and take all world markets up with it, including the JSE.