Your Monthly Market Newsletter, OCTOBER 2026

September brought a mixed market backdrop as investors balanced resilient economic data against persistent inflation pressures, rising interest rates and ongoing geopolitical uncertainty. Technology leadership helped lift the NASDAQ, while broader equity indexes and most sectors struggled as higher borrowing costs weighed on investor sentiment. 

Bond markets also faced pressure as Treasury yields moved higher following the Federal Reserve’s latest rate increase and continued focus on inflation. Even so, upward revisions to economic growth, steady unemployment and signs of cooling inflation offered encouraging evidence that the U.S. economy remains on solid footing heading into the final months of the year.

As always, we’re here to help you navigate changing market conditions and stay focused on your long-term financial goals. Please reach out with any questions.

Stocks

Stocks rallied in the month of August, with the tech-oriented NASDAQ index Stocks were mixed in September, with the tech-oriented Nasdaq continuing its rally from August and leading the major indexes with a gain of 3.30%. The broader market did not hold up as well, with the S&P 500 slipping -0.35% and the Dow Jones falling -4.12%. Volatility remained elevated throughout the month as uncertainty surrounding the conflict in the Middle East continued to drive swings in oil prices and add to inflation concerns. With inflation remaining elevated, the Federal Reserve raised interest rates at its September meeting as it continued its efforts to bring price pressures under control. Small-cap stocks, which tend to be more sensitive to tighter monetary policy and higher borrowing costs, felt the most pressure during the month, falling -5.25%.

Sector Performance

Sector performance was broadly negative in September, with nine of the eleven sectors declining by the end of the month. Technology was the only sector to post a gain, as valuations remained attractive following a strong earnings season and investors rotated back into the sector after taking profits elsewhere in the market. Among the worst performers were financials, as higher rates increased costs for banks and raised concerns that higher borrowing costs could slow future loan demand. Materials also struggled, as the sector is relatively energy intensive and rising energy prices put additional pressure on costs. While sector strength was much more concentrated in September, eight of the eleven sectors remain positive year-to-date, highlighting the broader strength we have seen across the economy and market in 2026.

Bonds

Fixed income markets rose despite marginally higher interest rates for the month of August. Interest rates and prices are negatively correlated, when interest rates go up, bond prices fall, but in August the sheer size of the yield earned by fixed income investors offset a very slight rise in interest rates. The new Federal Reserve (Fed) Chairman was the star of the show for bonds this month, as investors tried to parse out what the path for interest rates will be, and whether or not the Fed will hike interest rates to combat inflation. The Fed maintains a 2% inflation target, but inflation has now remained above that level for 65 consecutive months, suggesting higher interest rates may be necessary if inflationary pressures persist.

Economic Update

Economic data released in August was mixed, painting a picture of an economy that remains resilient, but is not without its blemishes. Gross Domestic Product (GDP) came in at 1.5%, the same as initial estimates in its first revision. This is below the 2% economic growth trend, but the details of the report showed stronger than anticipated consumer spending and business investment that held up. On the flip side, the economy showed a net job loss for the previous month, declining by -23,000 jobs, while the unemployment rate fell to 4.1%. This meant that the size of the labor force shrunk, as opposed to a significant amount of people leaving the labor force. Importantly, inflation this month did show signs of progress, with the Consumer Price Index coming back down to 3.4%. That figure is still elevated, but it is moving in the right direction, towards the 2% target. 

A new long-term study offers encouraging news for brain health, suggesting that maintaining healthy midlife habits may help delay the onset of dementia by more than a decade.

Researchers at New York University Langone Health analyzed decades of data from more than 12,000 U.S. adults and found that people who avoided three key vascular risk factors—high blood pressure, diabetes and smoking—between ages 48 and 68 lived nearly 13 years longer without developing dementia than those who had all three. The findings reinforce the value of everyday choices that support long-term health, from managing blood pressure and blood sugar to avoiding tobacco use. 

While no single habit can guarantee prevention, the study highlights a hopeful message: small, consistent steps in midlife may help protect cognitive health well into the future.

To learn more about this story, read the full article here.

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average: The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index: The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite: The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index: The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary: The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples: The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy: The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials: The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index: The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities: The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index: The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index: The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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^{A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.}

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