Economic headlines and market swings can make it difficult to keep the bigger picture in view. In this issue of Steady Investor, we explore the forces shaping markets and what they could mean for long-term investors, including:
A Hot Inflation Print and a Volatile Stock Market – September inflation data arrived this week, and the market did not seem too pleased about it. Consumer prices rose 3.7% from a year earlier, up from 3.4% in August and above economists’ 3.6% forecast. Core inflation, which excludes food and energy, rose 2.6% year over year and 0.3% from August, also slightly hotter than expected. As readers are likely well aware, energy remains the biggest source of pressure. Gasoline prices jumped 9.1% in September and are now up 34% from a year ago, while fuel oil is up 74%. But there were also signs of firmer pricing elsewhere in the economy. Airfare rose 22% year over year, and prices for computers and related equipment climbed 9.7%, their largest increase in data going back to 2006.Stocks also sold off Wednesday following the news, as inflation concerns coincided with another bout of weakness in AI-related shares. But investors should be cautious about assigning a tidy explanation to one trading day. Inflation data are backward-looking, concerns surrounding AI spending and valuations are not new, and short-term market moves can reflect everything from positioning and momentum to rates and sentiment.Put another way, this week’s market reaction does not tell us much less about where stocks go next.1
Keep Market Volatility in Perspective
Inflation pressures, rising costs, and signs of household financial stress can leave investors wondering what comes next. Keeping a long-term perspective can help you navigate the uncertainty and recognize opportunities along the way.
Our free guide, Using Market Volatility to Your Advantage², explores how periods of turbulence may create opportunities to strengthen your portfolio. Inside, you’ll learn:
Take a more informed approach to market uncertainty. Download your free copy today!
Download Our Guide, “Using Market Volatility to Your Advantage”2
U.S. Services Growth Remains Broad Despite Higher Costs – The U.S. services economy continued to expand at a healthy pace in September, offering a sign that economic activity remains resilient despite higher energy costs and interest rates.The ISM Services PMI eased modestly to 54.9 from 55.4 in August, but remained well above the 50 level that separates expansion from contraction. Services account for more than two-thirds of U.S. economic activity, making the survey an important read on the broader economy. Thirteen industries reported growth during the month, including retail, wholesale trade, transportation, finance, information, and accommodation and food services. Forward-looking measures were encouraging as well. The new-orders index registered 59.8, down slightly from August’s three-year high of 60.9 but still signaling strong demand. The less encouraging part was costs. ISM’s prices-paid index climbed to 74.0, its highest level since July 2022. But survey respondents repeatedly pointed to fuel costs and tariffs as major sources of pressure, with fuel mentioned more often than any other individual issue. This will be an issue to watch throughout Q4.3
Household Debt Stress Is Rising – More American families are struggling to stay current on their debts, according to the Federal Reserve’s latest Survey of Consumer Finances. Nearly 20% of families reported being behind on a loan payment at the end of 2025, up from roughly 12% in the previous survey three years earlier. More than 8% were at least two months behind, while the share of families devoting more than 40% of their income to debt payments rose to 8.6%, the highest since 2013. Those figures deserve attention, particularly because financial stress is not evenly distributed. Lower-income households have seen some deterioration in wealth, while higher-income households benefited more from rising asset values. But comparisons with the aftermath of the 2008 financial crisis need context. The Fed survey covers conditions only through 2025 and is released every three years, so it is not a real-time measure of consumer credit. More recent New York Fed data show aggregate delinquency rates were actually little changed in the second quarter of 2026, while total household debt edged down by $13 billion.
Households also remain far less burdened by debt payments than they were before the financial crisis. Debt-service payments consumed about 11.1% of disposable income in the second quarter, compared with nearly 16% in 2007. In our view, the broader household balance sheet still looks considerably healthier than the headline comparisons to 2008 might suggest.4
Make Your Next Financial Move with Perspective – A market decline can test your confidence, but it can also create opportunities worth considering. Understanding how volatility fits into the investment cycle can help you approach those moments with greater clarity.
Our free guide, Using Market Volatility to Your Advantage2, explores the potential benefits of market turbulence and lessons from history. Discover:
Take a more informed approach to market uncertainty. Download your free copy today!
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