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Market Update: September 2026

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Market Update: September 2026

By the Investment Committee at Rigden Capital Strategies

The Federal Reserve raised the federal funds target range by 0.25 percentage point this afternoon, to 3.75%–4.00%. The vote was 12–0. It is the first increase since July 2023.[27] Oil has been high on supply disruptions. Listed-company profits remain firm.

Snapshot

  • The S&P 500 closed September 15 at 7,585.73, down 0.45% on the day and about 2.7% below its August 13 closing high of 7,798.99. Year to date through September 15 the index was up about 10.8% on a price basis.[1] In early afternoon trading on September 16, after the 2:00 p.m. Eastern release, the S&P 500 was about 0.4% higher, the Nasdaq Composite about 0.8% higher, and the Dow roughly unchanged.[30] Intraday moves are not closing prices. Index returns are not the returns of any Rigden Capital Strategies client account.
  • West Texas Intermediate and Brent settled September 15 near multi-month highs after Mid-May. On the morning of September 16, WTI was near $105 and Brent near $108.[2] After the decision, Brent was reported near $105.58, down about 2.9% on the day.[30] Retail U.S. diesel has been reported near $6 a gallon.[3]
  • The 10-year Treasury yield closed near 5.00% on September 15. The 30-year yield was near 5.35%.[4] After the decision, the 10-year was reported near 4.94%–4.96% and the 2-year near 4.63%.[30] Retail quotes for a 30-year fixed mortgage have been reported near 7%.[5]

What the Federal Reserve decided today

  • At 2:00 p.m. Eastern on September 16, the Federal Open Market Committee raised the target range for the federal funds rate by 1/4 percentage point, to 3.75%–4.00%. The statement was approved 12–0.[27]
  • This is the first increase since July 2023. The committee had held the prior 3.50%–3.75% range at each of its first five meetings in 2026. From mid-2023 into early 2026 it had reduced the target by 1.75 percentage points across six moves.[12][27]
  • The statement said economic activity is expanding at a solid pace, domestic spending has been resilient, productivity growth is strong, and capital investment is robust. It said job gains have kept pace with the workforce and the unemployment rate has changed little. It also said uncertainty remains elevated, owing in part to geopolitical developments.[27]
  • On prices, the committee wrote: “Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.”[27]
  • Effective September 17, the Board set the interest rate on reserve balances at 3.90% and the primary credit rate at 4.00%. Standing overnight repurchase operations will be conducted at 4.00%. Standing overnight reverse repurchase operations will be offered at 3.75%.[29]
  • Chair Kevin Warsh’s press conference began at 2:30 p.m. Eastern and was still underway when this market update was finalized. This update is based on the written statement, the implementation note, and the Summary of Economic Projections — not on incomplete press-conference quotes.

The new projections

The September Summary of Economic Projections is the first set that includes 2029. Medians below are from the official table. They are each participant’s view of appropriate policy, not a committee promise.[28]

  • Median federal funds rate:
    • 4.1% at the end of 2026 (3.8% in June),
    • 4.1% at the end of 2027 (3.6% in June),
    • 3.9% at the end of 2028 (3.4% in June),
    • 3.6% at the end of 2029, and
    • 3.2% in the longer run (3.1% in June).[28]
  • A year-end 2026 median of 4.1% is consistent with one additional 0.25 percentage point increase after today’s move. News summaries of the dots said 16 of 18 participants who submitted a 2026 rate view expected at least one more increase this year; four of those saw two more as possible; two saw the committee stopping at today’s level. Chair Warsh again did not submit a projection, according to those same reports.[28][31]
  • Median real GDP growth: 2.3% in 2026 (2.2% in June) and 2.4% in 2027.
  • Median unemployment: 4.1% in 2026 through 2029 (4.3% for 2026 in June).[28]

Before the announcement, CME FedWatch implied a 92.5% probability of today’s 0.25 percentage point increase and a 7.5% probability of no change. A month earlier that September probability had been near 36%.[13] Those figures are now history. What remains is the path after today: the dots point to one more increase as the median case, with a minority seeing two more or none.

Inflation

  • The Consumer Price Index rose 0.4% in August after 0.1% in July. Over the 12 months ended August, the all-items index was up 3.4%, matching July’s 12-month rate.[6]
  • Excluding food and energy, prices rose 0.3% in August after 0.2% in July. That core measure was up 2.4% over 12 months, down from 2.5% in July.[6]
  • Energy accounted for most of the monthly increase. The energy index rose 2.1% in August after a 1.5% decline in July, and about 16% over 12 months. Gasoline rose 3.9% in the month. Fuel oil rose 10.1%. Food rose 0.1% in August and 2.7% over 12 months. Shelter rose 0.3% after 0.1% in July.[6][7]
  • The Producer Price Index for final demand rose 0.4% in August and 5.4% over 12 months. Final-demand energy rose 4.2% in the month, with diesel a large piece. Core PPI rose 0.2%.[8]
  • The personal consumption expenditures price index — the measure the Federal Reserve uses for its longer-run goal — was up 3.7% over the 12 months ended July.[9] That printed rate matches the committee’s new 2026 PCE median.[28]
  • The useful split is this: many core goods and services have cooled. Energy has not. Today’s 0.25 percentage point increase can slow demand. It cannot reopen a pipeline.

Oil

  • Prices rose in mid-September on a cluster of supply reports, then eased on September 16 after industry data showed a larger-than-expected build in U.S. crude inventories and as the session digested the Fed release.[2][30]
  • Reported drivers of the earlier rise include a shutdown of Saudi Arabia’s East-West pipeline after an attack, a pause in loadings at Yanbu, outages in Libya, damage to energy infrastructure in Russia and Ukraine, and shipping risk near the Strait of Hormuz.[2]
  • Private-sector scenario work spans a wide range — lower prices if flows normalize, higher prices if disruptions last for months.[10] Those are scenarios, not a base case we are adopting.
  • The United States is a large producer of crude oil and natural gas and a net exporter of both.[11] That does not cancel the household and freight cost of global oil. Diesel, jet fuel, and gasoline still set many of those costs.

Quarterly earnings

Second-quarter reporting for S&P 500 companies is complete for practical purposes. Third-quarter reporting begins in about a month. FactSet and other aggregators treat large investment-related gains at a small number of companies differently, so we show both the headline blended figure and the figure with those two companies removed. Company names below explain index-level math. They are not recommendations.

  • About 86% of S&P 500 companies that reported second-quarter results posted earnings per share above the consensus estimate, versus a five-year average of about 78%. About 80% posted revenue above estimate.[15]
  • Blended year-over-year earnings growth settled near 50% in FactSet’s series that includes large investment-related gains at Alphabet and Amazon. Removing those two companies left growth near 32%.[15] LSEG’s adjusted series put growth near 31%.[16] The estimate at June 30 was about 23%.[15]
  • Blended year-over-year revenue growth was about 15.0%–15.5%, the highest rate since the fourth quarter of 2021. The June 30 estimate was about 12.2%. The March 31 estimate was about 9.5%.[15][17]
  • All 11 sectors posted year-over-year revenue growth. Five posted double-digit revenue growth, led by energy, information technology, and communication services. Ten of 11 sectors posted earnings growth. Health care was the exception on a headline basis because of large charges at a small number of firms.[15][17]
  • For the third quarter, consensus as of early September pointed to earnings growth near 28.5%–28.7% and revenue growth near 11.9%.[18] If those estimates hold, it would be a third straight quarter of earnings growth above 25% and a third straight quarter of double-digit revenue growth.
  • Analysts raised the bottom-up third-quarter earnings estimate by about 1.2% from June 30 to August 31. Over the past 20 years the average change in that window has been a decline of about 3%. Energy, technology, and financials accounted for most of the upward revision.[19]

What is fueling profits, and the AI build-out

  • Three sources show up in the second-quarter results: higher energy prices and energy-sector profits; large technology platforms and chip suppliers tied to data-center construction; and a broader lift in revenue across most of the other nine sectors.[15]
  • Goldman Sachs research earlier this year estimated that companies tied to AI infrastructure could account for about half of S&P 500 earnings growth over a two-year window.[20] Bloomberg Intelligence has since noted that every sector is expected to post third-quarter earnings growth, which would be the first such sweep since 2021.[21]
  • The spending is physical. Hyperscale cloud providers are buying chips, servers, networking gear, power equipment, and construction. That spending is revenue for suppliers in technology, industrials, utilities, and parts of energy. Mid-year research cited hyperscaler capital spending near $750–$770 billion in 2026.[20][22]
  • The other side of that ledger is depreciation, power cost, and financing. The same research notes that rising depreciation at the buyers of the equipment can offset some of the later profit gain at the index level. Capital raises to fund the build-out can also dilute returns on equity.[22]
  • The Fed statement itself pointed to strong productivity and robust capital investment.[27] That language is consistent with an economy that is still spending on plant, equipment, and computing capacity. Concentration remains a fact. A handful of firms still account for a large share of index-level earnings growth.

The United States and the rest of the world

“Best house in a bad neighborhood” is a shorthand, not a conclusion. The United States still has deep capital markets, a large listed corporate sector, an energy production base, and the firms that design and sell much of the AI stack. That is the house. The neighborhood is mixed, not uniformly weak.

  • Europe: MSCI Europe was up about 12.5% year to date in dollar terms as of late August. Growth in the euro area remains slower than in the United States. Political noise in France and a sluggish German industrial sector are part of that comparison.[23]
  • Japan: MSCI Japan was up about 21% year to date in dollar terms as of late August. Earnings, semiconductor-equipment demand, and fiscal support have all been cited. That market is not a weak neighbor.[23]
  • Emerging markets: MSCI Emerging Markets was up more than 20% year to date as of late August, led by Korea and Taiwan and the same AI hardware chain. China has lagged, with MSCI China negative on several year-to-date snapshots.[23][24]
  • The energy shock is shared. Oil above $100 is a cost for importers and a profit tailwind for producers. The United States is both a consumer and a producer, which is a different position from much of Europe and Asia.[11]
  • Our reading: the United States still leads on corporate earnings power and listed-market depth. It is not the only equity market that has worked in 2026. Any U.S. allocation in a client account rests on the signed Investment Advisory Agreement — not on a slogan.

The good, the bad, and the ugly

The good

  • The unemployment rate was 4.1% in August. Employers added 162,000 jobs. June and July payrolls were revised higher. Average hourly earnings were up 3.1% over 12 months. Labor-force participation rose to 61.6%.[25]
  • Real GDP rose at a 1.5% annual rate in the second quarter after 2.1% in the first quarter.[26] The committee’s new 2026 growth median is 2.3%.[28]
  • Listed-company sales and profits are still growing.[15] The United States remains a large oil and gas producer.[11] The first market print after a widely expected hike was orderly: stocks modestly higher, the 10-year yield off the 5% handle.[30]

The bad

  • Headline inflation is 3.4%. Core inflation is 2.4%. Neither is at 2%.[6] The committee now sees 2026 PCE inflation at 3.7% and does not pencil 2% until 2029.[28]
  • A 10-year yield that spent this week near 5% raises the discount rate on future company cash flows and the cost of a new mortgage.[4] Housing activity remains constrained by the gap between existing loan rates and new loan rates. The S&P Case-Shiller 20-city index was up 2.1% over the 12 months ended June.[9][5]
  • Index-level profits are still concentrated.[15] The policy rate is now higher, and the median dot is higher still. That combination can slow interest-sensitive demand even if today’s vote was already priced.

The ugly

  • Oil near $105 remains a geopolitical price, not only a demand price.[2] Pipeline outages and shipping risk are not items a 0.25 percentage point rate change can fix. Diesel near $6 a gallon is a cost for freight, farms, and construction.[3]
  • Federal deficits remain large. Higher long-term yields raise the interest bill on existing debt.[4]
  • U-6, the broader underemployment rate, was 7.7% in August. Long-term unemployment was 1.9 million people, about 27% of the unemployed.[9][25]
  • The next two meetings are October 28 and December 9. The median participant has already written another increase into 2026. That is a projection, not a decision. It is also not a reason to change a written client policy on the afternoon of a meeting.

How the Investment Committee is using this

  • The hike was widely expected. We do not change an account’s written strategy because a priced 0.25 percentage point move was delivered. Policy allocations live in the Investment Advisory Agreement and, where applicable, the Investment Policy Statement.
  • We treat the new dots as a map of individual views, not as a calendar of future votes. A 4.1% year-end median can move at the next meeting.
  • We treat AI capital spending as a multi-year physical cycle — suppliers, buyers, power, and depreciation — not as a single-stock story.
  • We treat U.S. leadership as a relative statement about earnings power and market structure, with Japan, Korea, and Taiwan as proof that the neighborhood is not uniform.
  • Rebalancing, tax-aware harvesting, and cash-flow planning remain the tools we use when prices move. Those tools did not require a view on this morning’s vote, and they do not require a view on October’s.

Sources

Superscript numbers in the text correspond to the entries below. Dates are publication or data dates. Rigden Capital Strategies has not independently audited every underlying data point.

1. S&P Dow Jones Indices, via FRED and Morningstar/Dow Jones Market Data, “S&P 500 Falls 0.45% to 7585.73,” September 15, 2026. Closing high 7,798.99 on August 13, 2026.

2. WTI and Brent as reported September 16, 2026 by Bloomberg, Business Today, The Hindu Business Line, and ET Now. Morning readings near $105 (WTI) and $108 (Brent) after September 15 settlements at the highest levels since May 19, 2026.

3. U.S. retail diesel near $6 per gallon: Quartz, September 16, 2026; theFinancials.com energy-price table dated September 16, 2026.

4. U.S. Treasury constant-maturity yields: FRED and countryeconomy.com. 10-year near 5.00% on September 15, 2026; 30-year near 5.35% on September 16, 2026.

5. 30-year fixed mortgage quotes near 7%: NerdWallet, September 16, 2026 (Zillow-provided APR near 7.02%). theFinancials.com listed 6.76% on the same date. Mortgage News Daily, cited by CNBC after the decision, reported 7.19%.

6. U.S. Bureau of Labor Statistics, Consumer Price Index — August 2026, September 11, 2026.

7. Joint Economic Committee, Monthly Inflation Update, August 2026, released September 11, 2026.

8. U.S. Bureau of Labor Statistics, Producer Price Indexes — August 2026, USDL 26-1495, September 10, 2026.

9. Federal Reserve Bank of St. Louis, FRED. PCE +3.7% y/y as of July 2026; U-6 7.7% as of August 2026; S&P Case-Shiller 20-City Composite +2.1% y/y as of June 2026.

10. Oil-price scenario ranges reported September 16, 2026 by The Economic Times citing Goldman Sachs, JPMorgan, and Citi desk work. Third-party scenarios only.

11. U.S. Department of the Treasury, Economy Statement for the Treasury Borrowing Advisory Committee, August 2026.

12. Quartz and Fox Business, September 15–16, 2026, on the pre-meeting path: five 2026 holds, six prior reductions totaling 175 basis points, June 2026 12–0 hold.

13. CME FedWatch as reported the morning of September 16, 2026 by Quartz and Fox Business: 92.5% chance of a move to 3.75%–4.00%; 7.5% chance of no change; month-ago probability near 36%. Now a historical reference.

14. CME FedWatch year-end path as reported by Fox Business, September 15, 2026, before the decision.

15. FactSet Earnings Insight, as summarized by Stifel Sightlines (August 17, 2026) and The Research Note (August 20, 2026).

16. LSEG adjusted Q2 2026 S&P 500 earnings growth near 31%, TechTimes, September 9, 2026.

17. FactSet, “S&P 500 Reporting Highest Revenue Growth Since Q4 2021,” John Butters, August 10, 2026.

18. XTB, September 16, 2026; TheStreet week-ahead note, September 8, 2026; FactSet, September 6, 2026.

19. FactSet, “Analysts Increasing EPS Estimates for S&P 500 Companies For 2nd Straight Quarter,” John Butters, September 4, 2026.

20. Goldman Sachs Global Investment Research, as reported by Seeking Alpha, May 27, 2026, and Data Center Daily, June 30, 2026.

21. Bloomberg Intelligence, “AI-Fueled Profit Growth Set to Flow Through Every S&P 500 Sector,” September 16, 2026.

22. Goldman Sachs Global Investment Research, US Weekly Kickstart, June 12, 2026.

23. Raymond James Global Insights, August 31, 2026.

24. National Bank of Canada Monthly Equity Monitor, September 2026, and Capital Group World Markets Review, Q2 2026.

25. U.S. Bureau of Labor Statistics, The Employment Situation — August 2026, September 4, 2026.

26. U.S. Bureau of Economic Analysis, via FRED GDPC1 and the Treasury TBAC Economy Statement, August 2026.

27. Board of Governors of the Federal Reserve System, “Federal Reserve issues FOMC statement,” September 16, 2026, 2:00 p.m. EDT. 12–0 vote; target range raised 1/4 percentage point to 3-3/4 to 4 percent.

28. Board of Governors of the Federal Reserve System, Summary of Economic Projections, September 16, 2026, accessible table. Median funds rate, GDP, unemployment, PCE, and core PCE for 2026–2029 and the longer run, with June comparisons.

29. Board of Governors of the Federal Reserve System, Implementation Note issued September 16, 2026. Interest on reserve balances 3.90%; primary credit rate 4.00%; standing overnight RP 4.00%; standing overnight RRP 3.75%; all effective September 17, 2026.

30. Post-decision market prints on September 16, 2026: WRAL/Associated Press; Reuters via Yahoo Finance; CNBC; Investor’s Business Daily live coverage. S&P 500 about +0.4%, Nasdaq about +0.8%, Dow roughly unchanged; 10-year yield near 4.94%–4.96%; Brent near $105.58. Intraday, not closing prices.

31. Dot-plot composition as reported September 16, 2026 by CNBC, Fox Business, American Banker, and Reuters/Livemint: 16 of 18 submitted 2026 rate views expected at least one more increase; four of those saw two more; Chair Warsh again did not submit a projection.

Disclosures

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This Market Update is educational commentary prepared by the Investment Committee of Rigden Enterprises LLC d/b/a Rigden Capital Strategies (SEC File 801-132101; CRD 326930). It is not a research report, not a rating, and not a recommendation of any security, sector, region, or asset class. Index performance shown is price return unless noted and does not include dividends, fees, or taxes. You cannot invest directly in an index. Index results are not the results of any account managed by Rigden Capital Strategies. Intraday market levels cited after the FOMC release are not closing prices and can change before the close.

References to the CME FedWatch Tool describe market-implied probabilities derived from 30-day federal funds futures as of the date stated. After the September 16, 2026 decision those pre-meeting probabilities are historical. Numbered sources are third-party materials. Rigden Capital Strategies has not independently audited every underlying data point and does not guarantee completeness.

Forward-looking statements, including statements about the path of inflation, oil prices, Federal Reserve policy, corporate earnings, and relative regional performance, are inherently uncertain. Actual results will differ. The Summary of Economic Projections records individual participants’ views of appropriate policy; it is not a committee commitment. Hypothetical or scenario language is illustrative only.

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