September 12, 2026, Market Update
Market Recap: Searching for a Sanctuary
Stocks struggled for most of the week, as surging oil prices and rising interest rates weighed on investor sentiment. Energy and technology stocks, however, bucked the trend and finished the week higher. The energy sector benefited from higher fuel prices, while technology stocks were supported by another round of strong corporate earnings and continued enthusiasm surrounding artificial intelligence. Stocks rallied broadly on Friday as oil prices retreated, helping the major indexes recover some of their losses, although each still finished lower for the week.
The bond market remains under pressure as Treasury yields continue to rise, notwithstanding the Treasury Department’s plans to buy up to $63 billion of Treasuries this quarter. With the national debt now exceeding $40 trillion and oil prices sharply higher for the week, renewing concerns about inflation, many investors are struggling to find a safer haven for a share of their portfolio. Treasury Inflation-Protected Securities, or TIPS, may provide the sought-after sanctuary without the need to resort to costly and complicated investment products.
Like traditional Treasuries, repayment of principal on TIPS at maturity is backed by the U.S. government. Unlike conventional Treasuries, however, their principal adjusts with inflation, with current real yields ranging from roughly 2.3% to 3.1%, depending on when they mature. For investors who hold individual TIPS to maturity, that combination can provide both principal protection and a return above inflation.
Don’t hesitate to reach out if you would like to discuss whether TIPS would be a good addition to your portfolio.
Market Performance
Market Commentary
Investors have spent the last two years debating whether massive corporate spending on artificial intelligence will pay off. Developments this week at Anthropic (one of the world’s leading AI developers) provided a stark warning that the rapid advancement of AI has created new risks that extend well beyond stock and bond markets.
Jacob Coxon, an AI researcher who had been conducting pretraining research at OPENAI and Anthropic, publicly resigned from Anthropic this week over concerns that leading AI developers are “racing straight to self-improving superintelligence” that, in his estimate, could threaten human survival. He is far from alone in his concern. Industry leaders, including Elon Musk (Tesla, SpaceX), Sam Altman (Open AI), Dario Amodei (Anthropic), and Dennis Hassabis (Google), have all warned that mitigating the risk of extinction from AI should be a global priority alongside pandemics and nuclear war.
At the same time, the companies developing the most powerful systems face strong competitive incentives to continue pushing ahead. Furthermore, the United States, China, and other major powers increasingly view leadership in frontier AI as economically and strategically vital, making government regulation extraordinarily difficult.
The rapid explosion of artificial intelligence capabilities has created tremendous wealth for early investors and holds genuine promise for long-term investors and society alike. However, it also introduces a unique category of tail risk; one that cannot be mitigated by individual investors alone but rather requires action by industry and government leaders who prioritize mankind’s interests over their own.
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Evan Hubinger, who leads alignment science in Anthropic, said this week that he personally puts the probability of AI causing human extinction within the next decade at greater than 10%, while acknowledging Anthropic does not yet have a plan to mitigate that threat. By comparison, one major forecasting study put the median expert estimate of human extinction from nuclear war by 2100 at just 0.55%, while climate scientists generally regard human extinction from client change as extremely unlikely.