Capital at Work: Week of September 5, 2026

Markets mark time while the Fed’s choice sharpens

Last week’s headline numbers barely moved. The S&P 500 rose 0.13 percent, the Dow slipped 0.16 percent, and the Nasdaq added 0.42 percent. But the quiet surface concealed a good deal of churn underneath, and a flat week, in other words, is not the same as a calm one.

Also last week: Russell 2000 +0.15%, MSCI EAFE −0.16%, MSCI Emerging Markets +0.26%, Bloomberg U.S. Aggregate −0.18%.

The churn started with jobs. August nonfarm payrolls came in at 162,000, roughly triple expectations, with revisions adding another 55,000 to the prior two months and unemployment holding at 4.1 percent. Oil jumped nearly 10 percent to $91.48 as fighting in the Strait of Hormuz intensified. The 10-year Treasury yield rose five basis points to 4.78 percent, touching its highest level since January 2025 during the week. Gold gave back 1.1 percent.

The Fed now faces a genuinely difficult decision at next week’s meeting, and there is no consensus about what it should do. The July FOMC held rates at 3.50 to 3.75 percent on a 9 to 3 vote, with three governors preferring an immediate quarter-point increase. Since then, officials have talked past one another in public. One governor signaled he could support holding if disinflation continues, another said the Fed should tighten if pressures do not moderate, and the New York Fed president called rates appropriately positioned. July’s PCE price index rose 3.7 percent from a year earlier with core at 3.3 percent, both well above the 2 percent objective. Futures and prediction markets have been oscillating around a coin flip. Note the inversion from two years ago: the debate is no longer how fast to cut, but whether to hike. Thursday’s PPI and Friday’s CPI will likely settle it.

Bond markets are telling their own story, and it is global. Yields climbed to multiyear highs nearly everywhere last week: UK gilts to levels last seen in 2008, Japanese government bonds to a mark not reached since 1996. Chairman Warsh told G20 officials that the global savings glut which suppressed yields for a decade has reversed into an investment surge, a more structural explanation than the usual fiscal hand-wringing. Treasury Secretary Bessent pointed to bond buybacks as freeing balance sheet capacity for banks to absorb auction supply. Whatever the cause, the Bloomberg Aggregate lost 0.18 percent on the week, and rising long rates remain the most underappreciated risk to equity valuations.

On earnings, the second quarter was extraordinary on its face and merely good underneath. With 88 percent of the S&P 500 reported, 86 percent had beaten estimates, the highest share since 2021, and aggregate earnings came in 29.2 percent above forecasts, the largest surprise FactSet has recorded since it began tracking in 2008. Excluding one-time gains at Alphabet and Amazon, that surprise falls to 10.9 percent, still above average, though a very different picture. This bull market entered its 47th month in August and turns four next month. Estimates of the average bull market’s lifespan range from 2.7 years to just over five, so history offers no clean verdict. Valuation does give pause: the Shiller CAPE near 41 has been exceeded only once in 150 years. None of that is a timing signal. It is a reminder that returns from here will need to be earned by earnings rather than by multiple expansion.

We continue to advise investors to be disciplined in adhering to their investment policy and patient when the markets’ winds are pushing against the planned course.

Next week brings the Fed’s decision, with Thursday’s PPI and Friday’s CPI the last major data before it. The debate is genuinely unsettled, which is rare, and it is why we watch the data rather than the noise.

“Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves.”

Capital at Work is our weekly letter on what the markets did and what it means, written so you can repeat it at your own table. It arrives by email every Monday morning. Subscribe here.

Sources  Market data: J.P. Morgan Asset Management, Weekly Market Recap, September 08, 2026. Index returns, yields, key rates, and commodity prices as cited in the Weekly Data Center. All equity returns represent total return for stated period. Oil and Gold: Wall Street Journal Markets Digest, September 08, 2026. Economic data: MarketWatch.com. Charts and portfolio data: YCharts.com. Earnings data: FactSet, as cited in the S&P 500 Earnings Season Update. NDS Wealth Advisors believes these sources are reliable but cannot guarantee the accuracy or completeness of third-party data and assumes no liability for errors or omissions.

Disclosures  This material is for informational and educational purposes only and should not be relied upon as investment, legal, or tax advice, or a recommendation of any particular security, strategy, or investment product. Any economic forecasts or market outlooks expressed herein are forward-looking statements, subject to change without notice, and may not materialize. Investors cannot invest directly in an index. Index returns do not reflect the deduction of fees, commissions, or expenses, which would reduce overall performance. Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. This material does not consider the investment objectives, financial situation, or unique needs of any individual investor. Consult your financial advisor before making any investment decisions.