While The Nasdaq Hit a Record in September, Statements May Have Told a Less Exciting Story.
A Nexus Wealth Management recap of September 2026
Missoula, Montana
Key Takeaways
September was a month of two markets. The Nasdaq Composite rose 1.86% and set a record close. The S&P 500 slipped 0.45%, and the Dow Jones Industrial Average fell 4.29%.
The year is still solidly positive. The S&P 500 is up 11.77% year to date, the Nasdaq 15.57%, and the Dow 5.91%.
The Federal Reserve raised rates for the first time since 2023, to 3.75%–4.00%. The median policymaker expects one more increase before year-end.
The 10-year Treasury yield climbed from 4.75% to 5.29% — its highest level since 2007. Higher yields weighed on almost everything outside of technology.
Oil stayed elevated. Brent crude briefly topped $110 a barrel and finished the quarter near $104. The Strait of Hormuz is still far from normal.
The economy held up. August payrolls rose 162,000. Unemployment was 4.1%. Second-quarter GDP was revised up to 2.2%.
Third-quarter earnings season starts this month. Over time, stock prices follow profits. That is where our attention is.
Rates and oil at the end of September 2026 — the Fed's new target, the 10-year Treasury, the three-month T-bill, and Brent crude.
What this means for you - A record headline and a quieter statement can both be true. A narrow month like this is part of owning a diversified mix. - Higher yields cut both ways. Borrowing costs more, but cash and short-term bonds pay more than they have in years. - One month rarely changes a long-term plan. We're focused on third-quarter earnings, not September's prices. Have a question about your account? See "A good time to talk" below, or call us at 406-369-3396.
The month that set records and still felt down
If your September statement seemed less eventful compared to the headlines about record highs, you weren't mistaken. The Nasdaq, driven by technology, reached a record close of 27,244.28 on September 22, but much of the broader market retreated. Market leadership was concentrated, and rising bond yields impacted nearly everything outside of tech. As a result, it wasn't unusual for portfolio values to appear disconnected from the headlines about record growth.
Nothing has fundamentally shifted in the core narrative. Companies are still projected to deliver strong earnings growth, and the economy remains robust. The main change lies in the cost of money: as returns on secure bonds increase, investors tend to value each dollar of company earnings less.
This reflects how we interpreted September at Nexus Wealth Management in Missoula. This summary encapsulates the insights our research team shared in client discussions—highlighting what worked, what didn't, and the implications for your strategy here in Western Montana.
September's Market Returns At A Glance
S&P 500: −0.45% in September, +11.77% year to date.
Dow Jones Industrial Average: −4.29% in September, +5.91% year to date. Its weakest month since March.
Nasdaq Composite: +1.86% in September, +15.57% year to date.
Russell 2000 (smaller companies): −5.40% in September.
MSCI EAFE (developed international): −3.05% in September, +10.33% year to date.
MSCI Emerging Markets: −0.56% in September, +23.38% year to date.
September and year-to-date returns for six major indexes. Only the Nasdaq finished September up.
Earnings season is where our attention goes
Corporate profits remain the foundation under this market. Consensus estimates still call for roughly 31% earnings growth for the S&P 500 in 2026. Over the past twelve months, earnings have carried stocks through tariffs, an oil shock, and a Fed that turned from cutting rates to raising them.
Technology and communication services led the major sectors in September. Our view is that artificial-intelligence investment is driven by committed, long-term spending on chips, power, and data centers — not by the cost of borrowing. J.P. Morgan made the same point after the Fed meeting: tighter policy is unlikely to change the course of AI-related capital spending.
Third-quarter earnings reports begin this month. They will tell us more than September's prices did. That is why we see September as a valuation adjustment, not a break in the fundamental story.
What leaked air out: yields, the Fed, and oil
Bond yields
Here is the simplest way to think about September: bond yields rose, and that competed with stocks. The 10-year Treasury yield climbed more than half a percentage point to 5.29% — its highest level since 2007. A year ago it sat near 4.16%. The 30-year rose from 5.25% to 5.64%.
The 10-year Treasury yield climbed from 4.18% at the start of 2026 to 5.29% on September 30 — more than half a point of that move came in September alone.
The Fed
The Fed added to that pressure. On September 16, policymakers voted 12–0 to raise the federal funds target by a quarter point to 3.75%–4.00%. A rate increase is rarely welcome, but credibility matters. The Fed said the move would support a timelier return to its 2% inflation goal. We read it as a central bank protecting the purchasing power of your savings.
Inflation
Inflation explains why. August CPI rose 3.4% from a year earlier, with energy prices up 16.3% and gasoline up 27.4%. The month ended with some relief. August PCE inflation — the Fed's preferred gauge — came in at 3.4% headline and 3.0% core, cooler than forecasters expected.
Oil
Oil was the other weight. Brent crude briefly topped $110 a barrel in mid-September and finished the quarter near $104 — up about 42% for the quarter. Crude shipments through the Strait of Hormuz have largely recovered under military escort. But fuel shipments remain constrained, and diesel reached record highs. Higher fuel costs act like a tax on households and businesses.
Narrow leadership: small companies, the Dow, and rate-sensitive sectors
The headline index didn't tell the full story. The Russell 2000 index, which tracks smaller companies, dropped 5.40%. Meanwhile, the Dow declined 4.29%, breaking a five-month winning streak. Smaller companies often depend more on borrowing, making them more vulnerable to rising rates.
This isn't a flaw in diversification—it's simply what happens during a narrow market month.
Utilities, real estate, and consumer staples were among the weakest sectors, as higher Treasury yields made their dividends less attractive. These areas are typically held in portfolios for stability, but September served as a reminder of their sensitivity to interest rate changes.
When a handful of large technology stocks drive the headline gains while the broader market declines, a diversified portfolio can feel very different from what the news suggests. This isn't a flaw in diversification—it's simply what happens during a narrow market month.
Outside the United States: emerging markets held up better
Emerging markets were the steadier part of the international picture. The MSCI Emerging Markets Index slipped 0.56% in September and is up 23.38% year to date. Strong earnings and the Asian semiconductor supply chain tied to AI keep us constructive. BlackRock reached the same conclusion, moving emerging markets from neutral to overweight in September.
Developed markets had a harder month. The MSCI EAFE Index fell 3.05% in U.S. dollar terms. Europe and Japan import much of their energy, so a prolonged oil shock matters more there than it does in the United States. Government bond yields also rose around the world. A slightly firmer dollar trimmed international returns once they were translated back into dollars.
The larger picture is still positive. The MSCI ACWI ex USA Index rose 1.60% for the third quarter and is up 13.03% year to date. Inside those markets, selectivity matters. In China, the broad MSCI China index was down about 11% this year through September 21, while its technology segment was up about 7%. Owning the right parts of a market matters more than owning a country label.
Bonds: a hard month, and higher starting income
September was hard on longer-term bonds. When yields rise, prices on existing bonds fall. Longer maturities feel it most. Both stocks and long-term bonds dropped in the same month — a reminder that bonds have been a less dependable offset when inflation and rates are driving markets.
There is another side. Higher yields mean more income. At the end of September, the three-month Treasury bill yielded 4.20%, the 2-year 4.88%, and the 10-year 5.29%. Starting yield has historically been one of the most reliable guides to long-term bond returns. Vanguard made the same point after the Fed's decision.
We still prefer short- and intermediate-term bonds for income over a large bet on long maturities. BlackRock holds the same preference. Markets are pricing more increases than Fed officials have signaled. Vanguard now expects one more increase, to 4.00%–4.25%, by year-end. We treat Treasuries as a source of income first and keep diversification broad.
Quarter in Review: the third quarter and the long view
The third quarter was positive for both U.S. and international stocks, even with a rough September. The Russell 1000 returned 1.80% for the quarter, MSCI EAFE (net) 0.81%, and a hypothetical mix of 70% U.S. and 30% international stocks 1.50%. Year to date, those figures are 12.30%, 10.33%, and 11.71%.
The longer stretches tell the more important story. Annualized, the hypothetical 70/30 mix returned 11.94% over 5 years, 13.29% over 10 years, and 9.48% over 20 years. Those twenty years included the 2008 financial crisis, the 2020 pandemic, and the 2022 bear market. Staying invested through the hard parts did the work. Diversification means owning more than one source of return — not predicting which one will lead.
A hypothetical 70/30 mix next to its two indexes — for the quarter, the year to date, and 5, 10, and 20 years. Hypothetical illustration using index returns only.
Period | Russell 1000 | MSCI EAFE (net) | Hypothetical 70/30 |
|---|---|---|---|
Third Quarter 2026 | +1.80% | +0.81% | +1.50% |
Year to Date 2026 | +12.30% | +10.33% | +11.71% |
5 Years (annualized) | +13.01% | +9.32% | +11.94% |
10 Years (annualized) | +15.04% | +9.07% | +13.29% |
20 Years (annualized) | +11.16% | +5.38% | +9.48% |
Index returns through September 30, 2026 (total return, U.S. dollars). The hypothetical 70/30 portfolio holds 70% Russell 1000 Index and 30% MSCI EAFE Index (net), rebalanced to 70/30 once a year; quarter and year-to-date figures assume a 70/30 mix at the start of each period. Hypothetical illustration using index returns only. Results do not reflect any fees, expenses, or taxes, and do not represent any actual account or investment. You cannot invest directly in an index. Past performance is no guarantee of future results.
What this means in Missoula
Whether you're here in Missoula, Montana, or across the nation, September isn't a time to abandon a solid plan. Instead, it's an opportunity to evaluate the factors behind the changes on your investment statement.
Higher rates show up here in practical ways. Mortgage rates near 7%. Higher yields on cash. Diesel at record highs at the pump. They cut both ways — borrowing costs more, and cash and short-term bonds are more rewarding than they have been in years.
A single month rarely changes a long-term plan. Stay on the plan, stay selective, and let earnings — not one month's prices — be the guide.
A good time to talk
September was a good reminder that a quiet statement and a noisy headline can both be true. If anything in this recap raised a question, here are three conversations we are glad to have this fall.
A portfolio review. With leadership this narrow, it is worth checking that your mix has not become more concentrated than you intended.
Cash and old accounts. The three-month Treasury bill yielded 4.20% at the end of September. If you have idle cash or a 401(k) still with a former employer, we can walk through your options together.
Someone you care about. If a friend or family member is uneasy about the headlines, we are happy to offer a second opinion.
Call us at 406-369-3396 or email robert@nexuswealthmanagement.org.
About the Author
Robert Montes, CPFA®, is the lead Portfolio Manager at Nexus Wealth Management. He is responsible for analyzing market conditions, assessing economic trends, and developing wealth management strategies and recommendations that help investors work toward their financial goals. Robert’s team works with around 950 households and manages approximately 1,300 accounts, and Nexus is one of the top rated wealth management firms in Montana. He is an avid Jiu Jitsu practitioner and a former Army Ranger.
About Nexus Wealth Management
Nexus Wealth Management is a leading financial advisory firm in Missoula, Montana, proudly serving individuals, families, and business owners throughout Western Montana with personalized wealth management, retirement planning, investment strategies, and comprehensive financial advice. As an independent fiduciary advisor based right here in Missoula, MT, we focus on unbiased, client-first solutions tailored to your unique goals—whether you're planning for retirement, building generational wealth, or navigating complex financial transitions.
We're honored to be recognized as one of the top rated wealth management firms in the state of Montana, backed by over 200 five-star Google reviews from our valued clients. When searching for a trusted financial advisor in Missoula MT, wealth manager near Missoula Montana, or one of the top financial planners in Montana, Nexus Wealth Management consistently stands out for our commitment to transparency, education, and long-term results.
Ready to take control of your financial future? Visit us at nexuswealthmanagement.org or contact our Missoula team today for a no-obligation consultation. Let Nexus Wealth Management be your local partner in achieving lasting financial independence in Missoula and beyond.
Securities offered through LaSalle Street Securities, Inc, member FINRA/SIPC. Advisory services offered through LaSalle Street Advisors, Inc. Nexus Wealth Management is not affiliated with LSS, LSIA or any other affiliates. This material is for educational purposes only and is not a recommendation regarding any specific account, strategy, or product.
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