August 29, 2026 Market Update

Market Recap

U.S. stocks moved little this week despite renewed concerns about interest rates. Falling oil prices and generally strong corporate earnings provided support, while Friday's remarks from Federal Reserve Chair Kevin Warsh reminded investors that inflation remains the central bank's primary concern.

Bond yields moved lower earlier in the week before rebounding following Warsh's speech. He described the economy and labor market as resilient but warned that recent inflation readings have not shown enough improvement, concluding that the Fed still has “work to do” if inflation does not move convincingly toward its 2% target.

Next week, Mr. Market will turn his attention to the August employment report. A strong jobs report could encourage the Fed's willingness to keep monetary policy tight, while signs of weakening employment could complicate that decision. For now, lower inflation, not lower interest rates, is the Fed's priority.

Market Performance

Market Commentary: September Doesn’t Give A Damn About Its Bad Reputation

Since 1945, the S&P 500 has declined an average of 0.6% during September, making it historically the worst month of the year. Since 1950, stocks have finished September higher only 44% of the time.

Lower trading volumes, shifting investor expectations, and other seasonal factors have all been suggested as possible explanations. Whatever the cause, the pattern has persisted long enough that investors are likely to hear plenty about the dreaded “September effect” in the weeks ahead.

However, there is a critical distinction between historical tendencies and what will happen this year. Historical averages provide useful context about the past, but they reveal very little about whether stocks will rise or fall during any single month. Interest rates, economic growth, corporate profits, geopolitical developments, and investor sentiment are likely to matter far more than the date on the calendar.

September may have a bad reputation on Wall Street, but long-term investors should pay it little mind. As Shakespeare wrote: “Reputation is an idle and most false imposition; oft got without merit, and lost without deserving.”

In Case You Missed It: There Is No Plan

This past Wednesday, Bill Gates warned that world leaders, experts, and communities are failing to adequately prepare for artificial intelligence, writing: "There is no plan to ease the entry into the AI era." Gates highlighted three major risks: disappearing jobs, increasingly powerful criminals, and the possibility that AI could stunt children’s development and replace human relationships.