Stay Cautious Near Term

*Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

Dow Jones Industrial Average

The Dow had a volatile week and finished lower despite a strong Friday rebound. It closed Friday at 53,277.01, up 517.80 points (+0.98%) on the day, for a weekly decline of -0.85% — its second consecutive weekly loss. The index remains up approximately 10.8% year-to-date, making this more of a pullback than a major breakdown.(Source: Reuters / AP News)

Treasury yields were the key driver

The bond market increasingly became the market’s focal point. Rising long-term yields pressured equities because they raise borrowing costs and make stocks less attractive on a relative basis. The Treasury’s announcement that it would increase bond repurchases helped yields stabilize somewhat late in the week.(Source: Reuters)

Friday was a strong reversal

After Thursday’s significant selloff, the Dow jumped roughly 518 points on Friday. Goldman Sachs and Merck were particularly important contributors, accounting for roughly 214 Dow points of the advance.(Source: MarketWatch)

S&P 500

The S&P 500 had its first losing week after three consecutive weekly gains, falling about 1.4%. It closed Friday at 7,674.37, up 33.21 points (+0.43%) on the day. The index is now roughly 2% below its recent record high, and the biggest issue is no longer earnings — it is interest rates and yields.(Source: AP News / Investing.com)

Thursday was the key warning day

The market sold off sharply as Treasury yields moved higher, increasing concerns about borrowing costs and the Fed’s ability to ease policy. The S&P then bounced Friday, but not enough to erase the week’s losses.(Source: MarketWatch)

Technology and semiconductors were the weak spot

The S&P’s Information Technology sector fell about 3.35% for the week, while semiconductor stocks were particularly weak. That is important because the recent rally has depended heavily on large-cap technology and AI.(Source: LPL Financial)

Nasdaq

The Nasdaq had the weakest performance of the major indexes this week, falling 2.1%. It closed Friday at 26,180.45, up 113.29 points (+0.43%) on the day.(Source: MarketWatch)

Russell 2000

The Russell 2000 had a difficult week, falling about 1.6%, although Friday’s rebound helped significantly. It closed Friday at 3,017.87, up 25.44 points (+0.85%). Small caps are still outperforming for the year, with the Russell 2000 up approximately 21.6% YTD versus roughly 12.1% for the S&P 500 and 10.8% for the Dow. This week’s decline looks more like a pullback from a position of strength than evidence that the small-cap trade has broken down.(Source: AP News)

The Russell is extremely sensitive to interest rates. Small companies generally have more floating-rate debt, less access to capital, and greater sensitivity to economic conditions — so the rise in long-term Treasury yields is particularly important for IWM and the Russell 2000.

HYG — Junk Bond Watch

HYG was remarkably stable this week — an important signal given the weakness in stocks and the rise in Treasury yields. The S&P lost roughly 1.4% and the Nasdaq about 2%, while Treasury yields moved substantially higher. Yet HYG essentially went nowhere. That gives us a window into high-yield credit risk appetite: if investors were becoming seriously concerned about economic or credit deterioration, I would expect HYG to show substantially more weakness.(Source: Barron’s)

What I’m watching:

• Holding $79.50— constructive; suggests credit remains healthy.
• Breaking materially below $79.50— early warning that risk appetite is deteriorating.
• Breaking back above $79.70–$80.00— stronger confirmation that equity weakness is technical and rate-driven, not a credit problem.

CBOE Volatility Index: No Fear

The VIX was volatile during the week but ultimately finished lower, closing Friday at 15.13, down 5.5% on the day. Thursday’s equity selloff pushed the VIX above 16, but it didn’t stay there — rising long-term Treasury yields were the principal catalyst for that spike. Friday’s strong rebound brought the VIX back to 15.13, which remains well below its long-term average around 20 and nowhere near levels associated with panic or systemic stress.(Source: Yahoo Finance / CBOE Global Markets)

Richie’s read: The VIX is consistent with a cautious near-term but constructive longer-term view.

The level I’d watch now is 16–17. A sustained move above 17, particularly if accompanied by HYG and Russell 2000 weakness, would make me considerably more concerned. Conversely, if the VIX falls back toward 14–15 while the S&P stabilizes, that would support the idea that this week’s selling was largely a technical and rate-driven pullback.

Why Oil Refiner Stocks Can Keep Gaining

Source: Barron’s, print edition, p. 24 — Alex Rosenberg, August 24, 2026. The stocks and analyst views referenced below are drawn from that article and are included for informational and educational purposes only. They do not constitute investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results.

Refiners like Valero Energy (VLO) and Marathon Petroleum (MPC) have more than doubled this year. According to Barron’s, the surprising thing is that further gains may lie ahead — though as with all investments, there are no guarantees.(Source: Barron’s)

While crude oil is up about 50% in 2026, gasoline and diesel have risen more sharply. As a result, crack spreads — the industry term for the gross profits refiners make by converting crude oil into refined products — have skyrocketed. And the refiners are along for the ride.

These moves have a strong geopolitical flavor. Refining capacity in North America and Europe has long been flat to falling, but Ukrainian attacks on Russian refineries and shipping blockages in the Middle East have made the problem more acute.

While Valero stock is up 110% this year, investors appear to remain skeptical that the good times can last. Valero’s price-to-earnings ratio has fallen from about 15 times forward earnings a year ago to 10.3 times today, and its forward free-cash-flow-to-enterprise-value yield has risen from about 7% to 11%, per Bloomberg data. The numbers are similar for Marathon and Phillips 66 (PSX).

J.P. Morgan writes that Valero merits a modest valuation discount given its “supernormal earnings from geopolitical tailwinds,” but adds that “VLO is still an attractively valued refiner” despite the gains. Only 48% of analyst ratings on Valero are Buy or Overweight, according to FactSet. These are third-party analyst opinions and not a guarantee of future performance.(Source: Barron’s / J.P. Morgan)

These companies aren’t just sitting on their newfound profits. Not only do refiners pay reasonable dividends, but they have been increasing their stock buyback programs in recent months.

“Finally, the world is realizing that, hey, refining is pretty important.” — Rob Thummel, Senior Portfolio Manager, Tortoise Capital

Thummel is generally bullish on the refiners and particularly likes Valero due to its strong capacity to export refined products to Europe, which badly needs them.

“We’re definitely in a golden age of refining.” — Rob Thummel, Senior Portfolio Manager, Tortoise Capital

The article also notes structural tailwinds: plenty of U.S. and European refineries have shuttered or converted to renewable fuel plants in recent years, yet usage of gasoline and diesel remains strong. A speedy resolution to both the Ukraine and Iran conflicts could narrow crack spreads, though Barron’s notes the chance of that appears limited near term.

The items below reflect Richard Naso’s personal areas of focus for the coming week and are provided for informational and educational purposes only. They do not constitute investment advice or a recommendation to trade any security.

WATCH LIST — WEEK OF AUGUST 24, 2026

• Treasury Yields— Probably the most important variable right now. The direction of the 10-year and 30-year will drive equity sentiment.
• Nvidia Earnings— Particularly important for the AI and semiconductor trade.
• Jackson Hole / Fed Commentary— The market needs clarity on the path of rates.(Source: Economic Times)

This week was a reminder that the market can remain fundamentally constructive while becoming increasingly vulnerable in the near term. After reaching new highs last week, the major averages pulled back, with the Nasdaq and Russell 2000 leading the decline. The selling was driven less by a deterioration in corporate fundamentals and more by rising Treasury yields, higher oil prices, and renewed concerns over inflation and interest rates.

What keeps me from becoming overly bearish is that the underlying risk indicators have not confirmed a major change in market psychology. HYG remained relatively resilient, while the VIX finished the week near 15 — hardly a level associated with fear or forced selling. At the same time, the Russell 2000 remains one of the strongest-performing major indexes on a year-to-date basis.

That said, I think the market is at a near-term inflection point. The direction of Treasury yields has become increasingly important. If yields continue to move higher, particularly with the 30-year Treasury already above 5.2%, it could place additional pressure on higher-growth stocks and small caps.

For now, my approach remains cautious near term but constructive longer term. I don’t see enough evidence to abandon the broader bull-market thesis, but after the recent run to record highs, I would not be surprised to see additional consolidation or volatility. I’m watching HYG, the Russell 2000, the VIX, and Treasury yields for confirmation. If credit and small caps begin to deteriorate together, I would become more defensive. If they stabilize while yields settle down, this week’s weakness could prove to be a potential opportunity to add to positions.

The next catalyst will be important, with Nvidia earnings and the Jackson Hole Fed conference likely to determine whether the market can regain its momentum or needs more time to consolidate.

My overall view has not changed: stay cautious in the near term, but don’t lose sight of the longer-term opportunity.

— Richie

This content (“Content”) is produced by Richard Naso. The Content represents only the views and opinions of Mr. Naso, who is compensated by TradeZero for producing it. Mr. Naso’s trading experiences and accomplishments are unique, and your trading results may vary substantially from his. TradeZero does not endorse the Content and makes no representations or warranties with respect to the accuracy of the Content or information available through any referenced or linked third-party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security.

Past performance referenced in this Content is not indicative of future results.

Trading securities can involve high risk and the potential loss of funds. Trading on margin is for experienced investors and traders only, as the amount you may lose can be greater than your initial investment. Short selling as a securities trading strategy is extremely risky and can lead to potentially unlimited losses. Options trading is not suitable for all investors as it can involve risk that may expose investors to significant losses. Please read the Characteristics and Risks of Standardized Options (the Options Disclosure Document, or ODD) at theocc.com/Company-Information/Documents-and-Archives/Options-Disclosure-Document before deciding to engage in options trading.

TradeZero provides self-directed brokerage accounts to customers through its operating affiliates: TradeZero America, Inc., a United States broker-dealer, registered with the SEC and member of FINRA and SIPC; TradeZero, Inc., a Bahamian broker-dealer registered with the Securities Commission of the Bahamas; TradeZero Canada Securities ULC, a Canadian broker-dealer, member of CIRO and CIPF; and TradeZero Europe B.V., a Dutch broker-dealer authorized and regulated by the AFM under MiFID II (collectively, the “TradeZero Broker Dealers”).