In the third quarter of 2026 investors saw mixed performance. The S&P 500 rose 2.03%, the Nasdaq Composite
gained 2.47% and the Dow Jones Industrial Average dropped -2.70%. Globally, U.S. Equity Markets led with modest
advances during the quarter, Developed Markets Outside the U.S. were a close second and Emerging Markets
lagged posting narrowly negative returns. Information Technology and Energy sectors were top performers in the
quarter, while Real Estate and Consumer Discretionary sectors were top detractors.
Global geopolitical events were again a major influence on financial markets. The ongoing conflict involving the
United States, Israel, and Iran disrupted energy markets pushing Brent Crude Oil back above $100 per barrel during
September. Concerns surrounding oil and gas supplies were felt globally and energy-importing economies faced
renewed inflationary pressures. Escalation and continued conflict in Ukraine added yet another wrinkle to the
global economic outlook.
The U.S. Administration announced another wave of tariffs during the quarter, adding uncertainty to global supply
chains and international trade. Meanwhile, rising government borrowing and fiscal concerns contributed to a
significant selloff in global bond markets. The U.S. 10-year Treasury yield experienced its largest quarterly increase
(0.87%) since Q1 of 1994, closing the quarter at 5.29%. European government bonds also came under pressure.
Higher yields created a more difficult environment for fixed income investors and increased borrowing costs across
the global economy. Both U.S. and Global Bonds posted negative returns during the quarter.
The Federal Reserve Broad acted on monetary policy raising the target interest rate for the first time since July of
2023 citing resilient economic activity, strong productivity, robust capital investment, and elevated inflation. The
increase of 25 bps in September set the target range of 3.75% to 4.00%. Other Developed-Market Central Banks
took similar tightening measures with more than 80% of them raising policy rates during the quarter.
Markets enter the final quarter of 2026 with a combination of economic strength and elevated uncertainty.
Continued corporate investment in artificial intelligence, resilient economic activity, and solid earnings remain
supportive of equities, while higher energy prices, elevated interest rates, geopolitical tensions, trade policy, and
fiscal concerns present meaningful risks.
| TOT RETURN 3-MO* | TOT RETURN 12-MO* | TOT RETURN 3-YEAR* | TOT RETURN 5-YEAR* | CLOSING VALUE | |
|---|---|---|---|---|---|
| S&P 500 | 2.03% | 14.40% | 21.29% | 12.18% | 7,651.54 |
| Dow Jones Industrial Average | -2.70% | 9.72% | 14.96% | 8.51% | 50,906.05 |
| NASDAQ Composite | 2.47% | 18.54% | 26.66% | 13.20% | 26,861.06 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.