Market Insights
Get insights into what has been happening in US and world markets, and other economic indicators.
Bottom Line Up Front
- Despite mixed economic signals, US and Canadian stocks advanced in August.
- International markets were mixed, while the broader MSCI EAFT Index gained 1.80%.
- No Federal Open Market Committee (FOMC) meeting was held in August. At the Fed’s annual Economic Policy Symposium, Chair Kevin Warsh made clear his priority is inflation.
Time to Read
6 minutes
September 25, 2026
Monthly Market Insights: September 2026
US and Canadian markets
Renewed enthusiasm for AI pushed stocks higher in August as investors looked past mixed economic signals.
The Standard & Poor’s 500 Index advanced 2.62%, while the Nasdaq Composite rose 3.93%. The Dow Jones Industrial Average lagged, adding 1.34%. The S&P/TSX rose 2.96%.
Strong start
The month opened with higher stock prices thanks to diplomatic efforts in the Middle East. Big Tech helped pace the rally, further boosted by strong Q2 corporate reports. Investors seemed to believe that a soft job market update could influence the Fed’s outlook for short-term rates.
Mid-month malaise
Markets then traded in a sleepy summer trading range for the next several weeks as investors' attention shifted between economic reports and activity in the bond market.
AI-led rally
Over the last full week of the month, the three major averages looked past a slightly warmer-than-expected inflation report and focused on upbeat AI-related Q2 corporate reports. This rekindled positive market sentiment. Semiconductor stocks and adjacent names in the AI trade led the rebound, driving broader gains for the Nasdaq and S&P 500.
US sectors
Seven of the 11 S&P 500 Index sectors advanced in August.
Energy (+7.4%) led the pack for the second month in a row, along with Information Technology (+6.4%). Consumer Discretionary (+0.4%), Communication Services (+3.0%), Health Care (+4.9%), Materials (+4.5%), and Financials (+1.4%) finished the month higher.10
Consumer Staples (-0.1%), Industrials (-2.6%), Real Estate (-2.1%), and Utilities (-4.8%) were under pressure.
Canada recap
The S&P/TSX Composite Index notched a solid gain in August, powered by stronger bank earnings and better-than-expected gross domestic product (GDP) data.
Mining stocks set the pace, setting off a string of record closes for the TSX during the month. Energy stocks rallied as investors focused on higher oil prices amid Strait of Hormuz-related supply concerns.
A stronger-than-expected Q2 GDP report added to the rally, though the index gave back some ground late in the month as energy and technology stocks came under pressure.
Markets Recap
| Market/Index | August 2026 change | YTD change |
|---|---|---|
| S&P 500 | 2.62% | 12.28% |
| NASDAQ | 3.93% | 13.46% |
| Russell 2000 | 0.86% | 19.12% |
| S&P/TSX Composite | 2.96% | 14.37% |
| 10-Year Treasury Notes | 4.76 | 0.60 |
| Fed Funds Rate | 3.50-3.75 | 3.50-3.75 |
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. US Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid.
What investors may be talking about
Investors will be keeping close tabs on consumer trends in September.
Retail sales have generally declined over the past six months, putting greater focus on the consumer spending engine that generates two-thirds of US economic growth.
Any update on the consumer that exceeds or misses a forecast can generate a reaction from Wall Street. Retail reports tend to provide insights into how consumers are navigating the economic crosscurrents of inflation, the job market, and an uncertain rate outlook.
World markets
The MSCI EAFE Index rose 1.80% in August, thanks to pockets of strength throughout the world.
Europe was mixed, with Germany (+2.45%) leading and Spain (+0.97%) and Italy (+0.84%) not far behind. France (-2.06%) and the United Kingdom (-0.40%) were under pressure.
Markets outside of Europe were more mixed, too. India fell 1.46%, while Egypt added 2.66%.
It was the same “mixed market” story in the Pacific Rim. Japan (+3.03%) and Australia (+1.11%) were among the best performers, while Hong Kong (-1.23%) was under steady pressure. Korea picked up 3.40%, bringing its year-to-date gain to 61.84%.
World market recap
| Emerging Markets | August 2026 change | YTD change |
|---|---|---|
| Hang Seng (China) | -1.23% | -0.25% |
| KOSPI (Korea) | 3.40% | 61.84% |
| Nikkei (Japan) | 3.03% | 31.57% |
| Sensex (India) | -1.46% | -9.70% |
| EGX 30 (Egypt) | 2.66% | 31.17% |
| Bovespa (Brazil) | -0.33% | 10.11% |
| IPC All-Share (Mexico) | -2.25% | 1.74% |
| ASX 200 (Australia) | 1.11% | 4.15% |
| DAX (Germany) | 2.45% | 7.22% |
| CAC 40 (France) | -2.06% | 2.27% |
| IBEX 35 (Spain) | 0.97% | 15.41% |
| FTSE 100 (United Kingdom) | -0.40% | 8.99% |
| IT40 (Italy) | 0.84% | 17.06% |
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Indicators
- Gross Domestic Product (GDP). TThe economy grew 1.5% in Q2, unchanged from the Commerce Department’s initial estimate. Solid consumer spending and AI infrastructure investment remained primary drivers of Q2 growth.
- Employment. Employers shed 23,000 jobs in July, missing expectations for an 83,000-job gain. July’s decline was the first monthly contraction in the labor market since February. The unemployment rate in July edged down to 4.1% from 4.2% in June. Year-over-year wage growth rose 3.2%, just short of the 3.4% expected.
- Retail sales. Retail sales fell 0.6% in July over the prior month. Economists were expecting a 0.1% increase. Year-over-year retail sales increased 5.0% in July, easing from June’s upwardly revised 6.8% rise.
- Industrial production. Industrial output advanced a modest 0.2% in July over the prior month, slightly lagging market expectations for a 0.3% increase and just behind June’s upwardly revised 0.3% gain. Year over year, industrial production rose 1.1%, slowing from June’s upwardly revised 1.3% gain.
- Housing. Housing starts unexpectedly dropped 12.4% in July over the prior month, reflecting weak homebuilder sentiment as rising construction costs, still-elevated mortgage rates, and economic uncertainty took a toll. The drop follows June’s 19% jump.
Sales of existing homes fell 1.7% in July over the prior month to 4.06 million units, following June’s 1.4% drop. The median existing home sales price rose 2% to $434,100 from a year earlier, the second-highest median price on record after June’s $442,800 median price. The inventory of unsold homes fell 1.9% in July over the prior month to 1.54 million units, equal to 4.6 months of supply at the current sales rate.
Sales of newly constructed, single-family homes unexpectedly dropped 10.5% in July from the prior month to 607,000 homes. Regionally, month-over-month sales rose 30.3% in the Northeast and 6.2% in the West but declined 13% in the South and 42.7% in the Midwest.
- Consumer Price Index (CPI). Inflation rose 0.1% in July over the prior month, as expected, after June’s 0.4% decline. Core CPI, which excludes energy and food, rose 0.2% in July over the prior month as expected, up from June, when month-over-month core prices remained unchanged. Year-over-year CPI rose 3.4% as expected, cooling slightly from June’s 3.5% year-over-year rise. Core CPI increased 2.5% in July over the prior 12 months, down slightly from 2.6% in June.
- Durable goods orders. Orders of manufactured goods designed to last three years or longer increased 1.1% in July, more than doubling market expectations.
The Federal Reserve
While there was no official Federal Open Market Committee (FOMC) meeting in August, some would argue that one of the most important Fed meetings of the year took place in Jackson Hole, Wyoming.
It’s the Fed’s annual Economic Policy Symposium, which took place August 27-29. Each year, investors look for clues about where the Fed thinks the economy is headed over the long term. It was at Jackson Hole that then-Fed Chair Jerome Powell surprised investors in 2023 with his “higher for longer” interest rate message.
Fed Chair Kevin Warsh, who believes less is more when it comes to the Fed communicating about future policy moves, made it clear to attendees that inflation remains his primary focus. "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That's our job . . . our mandate . . . and our charge to keep," said Warsh.
By the numbers: back-to-school
146.8 billion
Total combined US back-to-school and college spending expected in 2026, a record high
$103.5 billion
Expected US back-to-college spending in 2026 to cross the $100 billion mark for the first time
$43.3 billion
Expected US back-to-school spending on K-12 students in 2026, up from $39.4 billion the year before
$863.86
The average amount US K-12 households expect to spend on the 2026 school year
62%
Share of US shoppers who had started their back-to-school shopping by early July
47%
Share of US shoppers who intend to buy only what is essential to start the school year
50%
Share of US back-to-school shoppers who planned to purchase items online, down from 55% the year before
$4.5 billion
Canada's total back-to-school market in 2026
6 million
The approximate number of K-12 students in Canada
99%
Share of Canadians who will shop for school items in person
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↵Data sources: Based on data from WSJ.com; TMX.com; CNBC.com; SSga.com; Yahoo Finance; Statistics Canada; TradingEconomics.com; USBank.com; MSCI.com; KPMG.com; National Association of Realtors; Realtor.com; NRF.com; Newswire.ca via Retail Council of Canada
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The forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the US stock market. The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general. The Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and considered a broad indicator of the performance of stocks of technology and growth companies. The Russell 1000 Index is an index that measures the performance of the highest-ranking 1,000 stocks in the Russell 3000 Index, which is comprised of 3,000 of the largest US stocks. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark for the performance in major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
The Hang Seng Index is a benchmark index for the blue-chip stocks traded on the Hong Kong Stock Exchange. The KOSPI is an index of all stocks traded on the Korean Stock Exchange. The Nikkei 225 is a stock market index for the Tokyo Stock Exchange. The SENSEX is a stock market index of 30 companies listed on the Bombay Stock Exchange. The Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange. The Bovespa Index tracks 50 stocks traded on the Sao Paulo Stock, Mercantile, & Futures Exchange. The IPC Index measures the companies listed on the Mexican Stock Exchange. The MERVAL tracks the performance of large companies based in Argentina. The ASX 200 Index is an index of stocks listed on the Australian Securities Exchange. The DAX is a market index consisting of the 30 German companies trading on the Frankfurt Stock Exchange. The CAC 40 is a benchmark for the 40 most significant companies on the French Stock Market Exchange. The Dow Jones Russia Index measures the performance of leading Russian Global Depositary Receipts (GDRs) that trade on the London Stock Exchange. The FTSE 100 Index is an index of the 100 companies with the highest market capitalization listed on the London Stock Exchange.
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