Higher Rates Reshape the Market

Read a quick 3-minute summary featuring what happened in the market and how it affects your finances.

Highlights include:

• In the third quarter of 2026, the S&P 500 Index gained 2%, while mid- and small-cap stocks declined. The S&P MidCap 400 and S&P SmallCap 600 had quarterly declines of 6% and nearly 8%, respectively.
• Looking at the year-to-date period, small-cap stocks remained ahead of their large-cap peers despite their third-quarter pullback. Through September 30, the S&P SmallCap 600 gained 14%, compared with 13% for the S&P 500 and 10% for the S&P MidCap 400.
• In September, the Federal Reserve raised the federal funds target range by 25 basis points, citing persistent inflation. Market expectations are for an additional one or two more rate increases in the near term.
• Inflation remained elevated in August, and oil prices added to inflation concerns during September, with Brent crude finishing the month over $100 per barrel as Middle East tensions created uncertainty around global supplies.
• As of the end of September, more than 40% of S&P 500 stocks were trading at least 20% below their 52-week highs, even as the index itself remained near a record high. That wide gap between winners and losers is a reminder that headline index performance can mask very different experiences across individual stocks and sectors.¹

¹ MarketWatch

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