September has always felt like the unofficial start of a new year. The beach bags get traded for backpacks, calendars fill back up, and everyone seems to settle into a routine again. Wall Street may not be heading back to the classroom, but after a strong first eight months of the year, it feels like a good time to check the market’s report card.
First up: corporate earnings get an A. Companies continue to make money, and importantly, that strength is showing up across more areas of the market—not just a handful of big technology names. That gives us a solid foundation as we head into the fall. Markets can certainly get distracted by headlines, but at the end of the day, healthy and growing businesses are still one of the most important drivers of long-term stock market returns.
Of course, AI remains the most popular kid in school. Technology companies continue to spend enormous amounts of money developing it, while investors are trying to figure out who will actually benefit the most. There is plenty of excitement, and probably a little too much enthusiasm in certain corners, but the investment and innovation happening in this area are very real. We expect AI to remain an important part of the market story for quite some time.
Unfortunately, no school year comes without a few pop quizzes. September and early October have historically been bumpier months for stocks, and this fall gives markets plenty to think about. Interest rates remain higher than many expected, geopolitical conflicts continue, and midterm elections are getting closer. After a strong run this year, some periods of volatility would be completely normal.
Meanwhile, the Federal Reserve seems to be the teacher who keeps saying, “We’ll see.” Rates have remained steady as the Fed waits for more evidence that inflation is under control. For bond investors, higher rates have created some challenges, but there is a silver lining: high-quality bonds are providing more meaningful income than they did for much of the last decade.
So, what should investors take away as we head into fall? Probably the same lesson we’ve learned many times before. Markets will have good days, bad days, and occasionally show up completely unprepared for the test. Our job is not to predict every surprise. It is to stay diversified, remain disciplined, and keep our attention on the long-term plan.
As always, please reach out with any questions. Thank you for your continued trust.
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. All data is provided as of September 2, 2026. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All index data from FactSet. The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Past performance does not guarantee future results. Asset allocation does not ensure a profit or protect against a loss. This research material was prepared by LPL Financial, LLC. Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Guaranteed | Not Bank/Credit Union Deposits or Obligations | May Lose Value