September Market Recap: Rates, Yields, and Energy

September brought a Federal Reserve rate increase, higher long-term Treasury yields, and rising energy prices as the U.S.-Iran conflict pushed oil prices upward. Most stocks and bonds declined together during the month, an uncommon outcome that gave diversified investors little room to gain ground.

Technology Led a Split Stock Market

Technology carried the month. The Nasdaq 100 rallied on strength in AI and chip stocks, while the S&P 500, the Dow, and shares of smaller companies fell as rising rates affected the rest of the market.

• The S&P 500 slipped 0.45%.
• The Nasdaq 100 rallied 3.23%.
• The Dow Jones Industrial Average slumped 4.29%.

Economic Growth Was Revised Higher

Second-quarter growth was revised up to a 2.2% annual rate, supported by stronger consumer spending and business investment, even as borrowing costs and energy prices climbed. That strength supports paychecks and profits, but it also makes inflation harder to tame.

Diesel Prices Moved Above $6

The national average for diesel passed $6 for the first time in September and, by late September, was up about 70% since the U.S.-Iran conflict began. Attacks on tankers and Russian refineries, along with Moscow's export ban, left refiners unable to keep up.

Because diesel moves nearly every product to market, its cost flows into freight, food, and delivery prices. This makes it a broader source of price pressure than gasoline.

The Federal Reserve Raised Its Benchmark Rate

At its September meeting, the Federal Reserve raised its benchmark rate by a quarter point, its first rate hike since 2023. After the meeting, most policymakers were forecasting another hike in 2026. Even with a softer inflation reading late in the month, the Fed has little reason to ease while prices are still rising too quickly.

Long-Term Treasury Yields Increased

The 10-year Treasury yield rose to its highest level since 2007. When yields rise, the value of existing bonds falls, especially for funds holding longer maturities. Over time, higher yields can increase rates on mortgages, car loans, and business borrowing.

What to Watch in October

October will reveal whether September's increase in energy prices and bond yields was a passing shock or the start of something more durable. The mid-month consumer price report will be the key test.

A fuel-driven increase might be manageable, but signs that higher costs are spreading into rents, insurance, and other services would strengthen the case for another hike at the Fed's late-October meeting.

Keeping Your Financial Plan in Focus

Market and economic developments can affect investment management, retirement planning, and broader wealth planning in different ways. As a fee-only fiduciary RIA serving Greenwood Village, Denver, and Colorado, Centerpiece Wealth Advisors helps clients consider these developments within the context of their individual financial plans.

If you have questions about recent market activity or want personalized guidance, our financial planning team at Centerpiece Wealth Advisors is here to help.