U.S. stocks opened August at record highs, and Wall Street posted its best week since April. The S&P 500 and the Dow Jones industrial average both hit all-time peaks, while the tech-heavy Nasdaq led the way with a gain of more than 5%. For investors in the UAE, two threads stood out this week: a weak U.S. jobs report that markets somehow cheered, and another sharp swing in oil tied directly to the Strait of Hormuz. Here is what moved markets between August 3 and 7, and what to watch next.
The headline story was a classic case of "bad news is good news." The U.S. economy added just 23,000 jobs in July, and prior figures for May and June were revised down by a combined 103,000. Soft hiring would normally worry investors, yet stocks rallied anyway. The logic runs through the Federal Reserve: a cooling labour market eases the pressure to keep interest rates high, and lower rates are generally supportive for equities. It is worth stressing the word generally - markets can just as easily read weak hiring as a recession warning, so this reaction is a reading of sentiment, not a rule.
Crude was the week's most volatile major asset, and the story sits close to home for Gulf readers. Prices slid to roughly US$79 a barrel on expectations of a deal to reopen the Strait of Hormuz, the chokepoint through which a large share of the world's seaborne oil - and much of the region's exports - passes. The mood flipped on Thursday when a leaked draft of the Iranian proposal, reportedly including transit tolls and a ban on U.S. and Israeli vessels, hit the wires and sent prices back up to around US$82 a barrel. For an economy where energy revenue and diversification plans are shaped by exactly this kind of headline, the swing is a reminder of how quickly the oil narrative can turn.
The plumbing behind the AI trade
This year's best-performing stocks are no longer just the mega-cap names. Increasingly, the winners are the companies building the physical infrastructure of artificial intelligence - memory, storage and servers. A cautionary note came from SanDisk, the top performer in the S&P 500 so far in 2026: even strong results did not protect it this week, and the stock fell on soft forward guidance. It is a reminder that in this market the outlook can matter more than the quarter that just closed.
The weekly scoreboard
The Nasdaq 100 (29,722) and the S&P 500 (7,758) both closed higher, while gold extended its run with a 6.3% weekly gain to around US$4,342 an ounce. Bitcoin was roughly flat near US$64,851, and the euro gained 1.7% against the dollar to 1.1561. A weaker dollar and record-bound gold are the kind of backdrop Gulf investors tend to watch closely, given the dirham's peg to the U.S. dollar.
Biggest movers
On the winning side, Palantir (PLTR) jumped 39.8%, SpaceX rose 22.8% and chip designer Arm (ARM) added 17.9%. The losers were led by energy and healthcare: Chevron (CVX) fell 5.4%, AstraZeneca (AZN) dropped 5.0% and memory maker SK hynix (SKHY) slipped 4.0%. The split tells its own story - money chased the AI and defence-adjacent names and stepped back from the old-economy energy and pharma giants.
On the radar: Meta and Alphabet
META is earning more than ever - US$60.8 billion in quarterly revenue, up 28% - but its spending overshot what management had guided, and the market punished the stock, which is now down 21% over the past 12 months. It is the same tension that has defined this earnings season: heavy AI investment is rewarded only when investors can see a return on it. Alphabet (GOOG), meanwhile, says its Gemini assistant now has 950 million users and reports a cloud order backlog of roughly US$514 billion. SpaceX (SPCX) also surprised with US$7.8 billion in revenue, up 92%, and bounced about 23% in two days after a share unlock on enthusiasm for its AI-chip venture alongside Tesla.
Mood of the week: optimistic. Sentiment swung from fear to greed in a single week. Two things are worth remembering: the August-to-October stretch has historically been the weakest of the year for the S&P 500, and even Bank of America has suggested trimming risk. No investment is without risk, and a strong week does not change that - stick to your plan.
The week ahead
The data highlight lands on Wednesday with the July U.S. inflation report (CPI), the single most important release of the week. Retail sales follow on Friday. On the earnings calendar, Cisco reports Wednesday and Applied Materials on Thursday, with several consumer and financial names filling out the schedule. For UAE readers, the CPI print is the one to watch: it feeds directly into Federal Reserve expectations, and through the dirham's dollar peg, into the rate backdrop at home.
Legal Notice: Education, not advice. This is not an investment recommendation regulated by the SCA or personalised financial advice. Past results do not guarantee future returns. Investing always involves risks.
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Weekly change by asset (Aug 3-7)
Change vs. the prior Friday close. Reference figures.
