Monday Market Review: September 14, 2026

Weekly Summary

On a shortened Labor Day week, economic data included continued rises in both consumer and producer price inflation, driven by August’s spikes in fuel prices. Existing home sales declined, as did consumer sentiment.

Equities fell across the board globally last week, due to geopolitical tensions, resulting inflation, and higher yields. Bonds pulled back to the same spike in interest rates. Commodities were mixed, with another sharp rise in oil prices, and weakness elsewhere.

 What to know about the markets:

U.S. stocks fell back for the week, with large cap growth slightly outperforming small caps. A variety of tensions caused markets to trough by mid-week, with the Middle East conflict, attacks on Saudi energy infrastructure, and the Houthis capturing a port city in Yemen, caused oil prices to reach $100. This was in addition to U.S.-Canada tariff battles continuing, strong inflation readings, and higher Treasury yields putting a damper on sentiment. Chances of a Federal Reserve rate hike rose further, following a strong PPI report, with the headline figure surpassing 5%, pointing to continued price pressures the committee may feel compelled to address.

By sector, gains in  energy and communications (mostly Meta) were offset by declines in health care, materials, and utilities, with the latter notoriously sensitive to interest rates. Within tech, Apple’s much anticipated annual event included the debut of an expensive foldable phone, which resulted in a mixed response. There were also unsettling comments from Anthropic that they believed AI had the potential of wiping out humanity; this is interestingly prior to their planned IPO, which could have been part of the sales pitch pointing to their required expertise in keeping that from happening.

Foreign stocks pulled back for the most part last week, in keeping with domestic equities. The ECB raised key rates by 0.25% to 2.50%, as expected, with further hikes expected to end the year. Emerging markets mixed, with gains in South Korea, Turkey, and Brazil, based on different drivers, while declines were strongest in China and India, seen as having higher exposure to Middle East oil prices that have seen pressure again.

Bonds experienced sharp declines as yields rose across the U.S. Treasury curve, in keeping with strong inflation readings and a solidification of expectations of a Fed hike this coming week. Floating rate bank loans suffered the least damage, with few declines, while long-term bonds naturally suffered the worst damage, down upwards of -2%. Treasury Secretary Bessent announced that “I am the house now,” with Treasury buybacks being tripled, focused on the 10- and 20-year spots on the curve. However, the market continued to test its resolve, and the 10-year note reached its highest yield in three years. While fiscal matters are the primary headline story behind higher yields, persistent inflation and stronger growth generally (led by AI infrastructure activity and debt financing demand) remain causes as well.

Commodities were mixed for the week, with sharp gains in energy offset by lower prices for agriculture, and industrial and precious metals. Crude oil prices rose another 9% last week to an even $100/barrel, with intensification of Middle East attacks. As of late, pressure on distillates has become more newsworthy, with diesel reaching an all-time high of $6/gallon in the U.S., especially affecting the transportation industry.

 Our Weekly Economic Notes:

Notes key: (+) positive/encouraging development, (0) neutral/inconclusive/no net effect, (-) negative/discouraging development.

(-) The Consumer Price Index reaccelerated by 0.4% in August, relative to the 0.1% rise in July, similar to expectations. Roughly one-third of the overall gain was due to a 3.9% increase in gasoline prices during the month, naturally related to Middle East tensions. Core CPI, after removing food and energy prices, rose 0.3% on a seasonally-adjusted basis, a tenth higher than the prior month. Per the BLS, groups seeing the strongest one-month increases included communication (with telephone services up 5.4%), hotel lodging (2.5%), airline fares (2.7%), education tuition (0.8%), and used cars/trucks (0.4%). Shelter costs continued to run at a 0.3% seasonally-adjusted rate, which annualizes to a rate well above the Fed target. On the other hand, medical care (-0.2%) and auto insurance (-0.8%) saw decreases.

Year-over-year, CPI rose 3.4% on a headline level and 2.4% for core, with the two coming in at a similar pace as the prior month on an unrounded basis. Using alternative measures, in a piece of good news, “All items less food, shelter, and energy” rose only 2.0% over the past year. For perspective’s sake, the annualized 5-year headline CPI rate is running at 4.1%, well above the 20-year rate of 2.5%, but not far from the 100-year rate of 3.0% (which includes a wide variety of economic and inflation cycles, to say the least). Obviously, the back-and-forth behavior of petroleum as the Middle East conflict has vacillated between intensification and inaction, with a higher price trend overall, and has driven prices higher in a variety of segments. A key question has been whether or not the FOMC has felt compelled to act in response and raise rates this coming week—futures markets have answered by raising odds of not only a September hike, but a few more hikes into 2027. After the CPI release, odds for Sept. action rose from around 60% to just under 90%, although a variety of private economists continued to push back against a hike being a foregone conclusion.

(-) The Producer Price Index rose 0.4% in August on a headline level, matching expectations, while core PPI, removing food and energy, rose 0.2%, a tenth below expectations. That included a 1.1% gain in goods prices (energy up 4.2%, accounting for about half of the total monthly PPI rise), while services barely budged at 0.1%. Over the past 12 months, headline and core PPI rose 5.4% and 4.6%, respectively. The year featured a 7.7% rise in goods (energy up 24%) and 4.5% increase in services. What’s been more notable recently is a lesser impact from crude oil directly, but higher prices for distillates like unleaded gasoline and diesel, which have been even more impactful directly on businesses and end consumers.

(-) Existing home sales declined by -2.0% in August to a seasonally-adjusted annualized rate of 3.98 mil. units, just below the -1.7% decline expected. Single-family declined by -2%, while condos/co-ops fell nearly -3%. By region, the West held up best, with no change, while the other three areas declined, with the Northeast faring worst at -4%. Nationally, sales were down -1.2% over the past 12 months, with all regions down except the South, which was unchanged. By home price segment, the bulk of volume declines were in the buckets of $0-100k and $100-250k, while home sales for $1mil.+ properties rose by 4%, in another example of ‘K-shaped’ economic activity. The median sales price fell by -1.7% for the month to $429,100, which corresponded to a 1.6% gain over the past year. Inventory rose to 4.9 months’ supply, now lying at a 10-year high point, and just below the 5-ish number considered a ‘normal’ market (even if it doesn’t appear to be normal in many other ways). Ever-optimistic, the NAR highlighted what they viewed as strong recent job growth this year as a potential source of buying demand, with higher inventories also a plus, in that it provides homebuyers “better opportunities to negotiate.” Obviously, continued high mortgage rates in the 6.0-7.0% range over the past three years for the 30-year fixed remain a significant affordability hurdle, coupled with higher energy and food costs resulting from the Middle East conflict. Another significant ongoing issue is the lack of movement of existing homeowners with low-rate mortgages outstanding in the under 4% range (roughly 50% of all, per data from Apollo Global Management), who have little financial incentive to give that up to pay a higher rate if they can avoid it.

(-) The preliminary Univ. of Michigan index of consumer sentiment for September showed a decline of -3.9 points (or -7.5%) to 47.8. The reading was led by a substantial drop in future expectations (-11%), as assessments of current conditions declined only modestly (-2%). Inflation expectations for the coming year rose from 4.0% in Aug. to 4.6%, with the gap pointed out between that and February’s 3.4% just before the Iran conflict. After a run of several months at stable readings, longer-run 5-10 year inflation expectations ticked up by a tenth to 3.4%. The survey sponsor noted that the drop in sentiment was similarly negative across both political parties, as expectations over the next year for personal finances and business conditions “plunged,” along with a “resurgence in fuel prices and trade tensions” creating more consumer angst. Sentiment remains down -13% over the past year, and -16% from the start of the Iran conflict.

(0) The NFIB Small Business Optimism Index for August fell by -1.1 points from July’s one-year high point to 98.7. However, it remained above the 52-year average of 98.0. The Uncertainty Index fell by -2 points to 89, but continued to hover well above the long-term average of 68. Per the NFIB, business uncertainty remained elevated as they “fact a mixed set of challenges” that included “weakened sales, supply chain disruptions, and inflation pressures,” with over 60% noting supply chain issues disrupting their businesses. Though, while expectations for the economy “dimmed,” owners remained “largely positive” in the terms of the status of their own businesses (57% as “good” and 28% as “fair”). Other notable findings included 35% of owners reported job openings they couldn’t fill (about 11% higher than average), and of the 56% of owners attempting to hire, 82% reported few or no qualified applicants. (This gets back to a long-standing issue of domestic labor availability and training mismatches that were highlighted during the pandemic especially.) Looking ahead, 17% of owners plan to create new jobs in the next three months, down just -3% from July’s 4-year high. This interesting view from the standpoint of small business showed perhaps a more optimistic outlook than expected, but also featured the same headwinds seen in other economic surveys, notably inflation and general economic and policy uncertainty, along with taxes, which are a perennial complaint.

(+) Initial jobless claims for the Sep. 5. ending week fell by -1k to 206k, near the 205k expected by consensus. Continuing claims for the Aug. 29 week fell by -1k as well to 1.774 mil., below the median forecast of 1.780 mil. With few state-by-state outliers, the national picture continues to look benign by those range-bound metrics, with no signs of layoff activity.

Have a good week.

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Centered Financial, LLC is a registered investment adviser offering advisory services in the State of California, Utah, Texas and in other jurisdictions where exempted. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no assurance that the techniques, strategies, or investments discussed are suitable for all investors or will yield positive outcomes. To determine which strategies or investment(s) may be appropriate for you, consult your financial adviser prior to investing. Any discussion of strategies related to tax or legal planning is general and is not intended as tax or legal advice. Please consult appropriate tax and legal professionals for recommendations pertaining to your specific situation.

Sources: Ryan M. Long, CFA; Director of Investments; Palouse Capital Management

Palouse Capital Management, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Citigroup, Deutsche Bank, FactSet, Financial Times, First Trust, Goldman Sachs, Invesco, JPMorgan Asset Management, Marketfield Asset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, PIMCO, Standard & Poor’s, StockCharts.com, The Conference Board, Thomson Reuters, T. Rowe Price, Univ. of Michigan, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wall Street Journal, The Washington Post. Index performance is shown as total return, which includes dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product. Advisory Solutions Group is a registered investment advisor.