September 19, 2026 Market Update

Market Recap 

The Federal Reserve took center stage Wednesday, raising its benchmark interest rate by a quarter point for the first time since 2023 as inflation remains stubbornly above its 2% target. The decision followed another sign of economic resilience: August retail sales rose a stronger-than-expected 1.2%, suggesting consumers have continued spending despite higher prices and borrowing costs.

Stocks fell following the Federal Reserve announcement before rebounding sharply on Thursday. Investors appeared to take some comfort from the economy’s continued strength, even as higher interest rates raised concerns about the outlook for corporate profits and consumer spending. For the week, the S&P 500 finished roughly flat, while the Dow Jones Industrial Average fell about 1.7%.

The Fed’s latest projections also suggest that another rate increase may be necessary before year-end. Financial markets appear increasingly prepared for that possibility, but if borrowing costs rise too far or remain elevated for too long, that could spell trouble for the broader economy.

Market Performance

Market Commentary: Higher Rates Can Be Good For You

10-year Treasury yields, a benchmark for US mortgage loans and bonds globally, surpassed 5% on Wednesday for the first time since 2023. That made for another difficult week for bond holders because bond prices fall when yields rise.

But higher yields are not necessarily bad news for long-term investors. Bonds bought today generate more income and investors who hold individual bonds to maturity are generally unaffected by interim price fluctuations. Meanwhile while bond funds drop when rates rise, they too should gradually benefit from higher yields as lower-yielding holdings are replaced with bonds paying higher rates.

As discussed in last week’s Market Update, TIPS remain particularly attractive in the current environment. Municipal bonds also warrant consideration because their interest is generally exempt from federal income taxes, and many state and local governments face fewer fiscal challenges than the federal government.

So don’t get too discouraged if rising interest rates are negatively affecting your monthly portfolio statement. Higher rates are a bit like bitter medicine; unpleasant at first, but ultimately good for you.

In Case You Missed It: Pain At The Pump

The national average price of diesel reached a record $6.45 per gallon this week, up nearly 74% from a year ago. Prices that high will make it difficult to Keep On Truckin’.