Over the last six months or so, I've been preparing people for whatever the next market downturn may bring. Market ups and downs are normal.
God's common grace and His image in us are undeniable in humanity's ability to create and produce. That is a significant reason why companies (stocks/equities) have continued to grow and thrive over time, even through dark periods in markets and economies.
Today's market is showing us something worth understanding. Some have noticed that the headlines say the market is near an all-time high, yet their own portfolios may not feel like they are keeping pace. That experience is real, and it is not unique to any one investor.
As of late September, roughly 59% of the stocks in the S&P 500 sat at least 20% below their own all-time highs. At the same time, fewer than half traded above their 200-day average while the index itself stood within about 1% of a record, a combination last seen in April 2000. Many investors and advisors are feeling this same gap right now. Markets have historically grown over many long-term periods, but individual investments and portfolios can experience substantial or permanent losses.
Our portfolios are not designed to chase the few mega-cap names driving the index. That is intentional. Our approach considers each client’s goals, risk tolerance, and values. Portfolio returns may differ from the S&P 500, including periods of underperformance.
For clients, I encourage you to stay steady and keep your eyes on the plan we build together.
September review
In September, the Federal Reserve delivered its first rate hike since 2023, and long-term Treasury yields jumped as the U.S.-Iran conflict drove oil prices higher. Most stocks and bonds fell together, an uncommon pairing that gave diversified investors little room to gain ground.
With that as context, here’s how the major indexes finished the month.
What Shaped the Month
Growth outpaces expectations. Second-quarter growth was revised up to 2.2% annually, lifted by stronger consumer spending and business investment, even as borrowing costs and energy prices climbed. That strength supports paychecks and profits, but it also makes inflation harder to tame.
Diesel crosses $6. The national average passed that mark for the first time in September and by late September was up about 70% since the U.S.-Iran conflict began, as attacks on tankers and Russian refineries, along with Moscow’s export ban, left refiners unable to keep up. Since diesel moves nearly every product to market, its cost flows into freight, food, and delivery prices, making it a broader source of price pressure than gasoline.
The Fed hikes rates. At its September meeting, the Federal Reserve raised its benchmark rate by a quarter point. After that, most policymakers forecast another hike in 2026. Even with a softer inflation reading late in the month, the Fed has little reason to ease while prices are still rising too quickly.
Bond yields climb. The 10-year Treasury yield rose to its highest level since 2007. When yields rise, the value of existing bonds falls, especially for funds holding longer maturities. Over time, higher yields can increase rates on mortgages, car loans, and business borrowing.
What to Watch in October
October will reveal whether September’s surge in energy prices and bond yields was a passing shock or the start of something more durable. The mid-month consumer price report will be the key test. A fuel-driven increase might be manageable, but signs that higher costs are spreading into rents, insurance, and other services would strengthen the case for another hike at the Fed’s late October meeting.
Additional Information (For the Curious)
- S&P 500 Index Sector Prices vs. All-Time Highs(Market Commentary)
- 2026 Q3 Markets In Perspective(Client Resource Kit)
- 2026 Q3 Wars, Geopolitical Shocks & The Stock Market(Client Resource Kit)
Know that I am keeping a close eye on the markets and am here if you have any questions. Please don’t hesitate to reach out. I am happy to be a resource for you.
Take care,
David Eck
This material is provided for informational and educational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Indexes are unmanaged and cannot be invested in directly. The S&P 500 Index is provided for general market comparison purposes and may not be representative of any client's portfolio. Economic and market information is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness.