Market Update: Q3 2026 

Hello! We’re happy to share our stock market update for the third quarter of 2026.

If you remember our Q1 update, the year started with a significant market decline. Then in Q2, stocks rebounded sharply, with the S&P 500 having its strongest quarter in several years.

Q3 has been a little different. Markets have continued to move higher overall, but investors have been paying close attention to inflation, interest rates, oil prices, geopolitical events, and the continued growth of artificial intelligence.

As we’ve seen throughout 2026, markets can change quickly. This quarter is another reminder that there will always be things happening in the economy and around the world that can create uncertainty.

What happened in Q3?

Here are some of the major things that shaped the market during July, August, and September:

• Technology and AI continued to be important. Technology stocks remained a major driver of the market this quarter. Investors continued to focus on the growth of artificial intelligence, and the amount of money companies are investing in AI technology. In September, the Nasdaq reached a record high, helped by renewed optimism around AI-related companies.
• Interest rates became a major focus. Inflation remained higher than the Federal Reserve would like. In September, the Federal Reserve raised its target interest rate by one-quarter of a percentage point, bringing the target range to 3.75% to 4%. The Fed said inflation remains elevated and that uncertainty around the economy remains high.
• Oil prices continued to create uncertainty. Events in the Middle East continued to affect oil prices. When oil prices rise, it can put additional pressure on inflation, which can also influence interest rates and the stock market. In September, oil prices moved significantly as investors reacted to developments involving the conflict and potential diplomatic progress.
• The economy remained relatively strong. Despite all of the uncertainty, economic activity has continued to expand. The Federal Reserve’s September projections showed a median expectation for real GDP growth of 2.3% for 2026, while the unemployment rate was projected at 4.1%.
• Overall, Q3 has shown that strong corporate earnings and continued investment in areas like technology and AI can support markets even while investors are dealing with higher inflation, interest-rate uncertainty, and geopolitical risks.

How Did Investments Perform in Q3?

As of the close of September 30, the major U.S. stock indexes performed as follows during Q3:

• S&P 500: up about 2.0%
• Nasdaq Composite: up about 2.5%
• Dow Jones Industrial Average: down about 2.7%
• Russell 2000: down about 7.5%

These numbers reflect the performance for the third quarter, from the June 30 close through the September 30 close.

What Should We Watch for Q4 2026 and Beyond?

As we head into the final quarter of the year, there are several things we will continue watching:

• What will the Federal Reserve do next? Inflation remains above the Fed’s 2% goal, and the Fed’s September projections show continued uncertainty about the appropriate path for interest rates.
• Will inflation continue to slow? Inflation will remain important because it influences interest rates, consumer spending, and the cost of borrowing.
• Can corporate earnings keep growing? Strong company earnings have helped support the stock market this year. Investors will continue watching earnings reports to see whether companies can maintain that growth.
• What happens with AI? Artificial intelligence continues to be one of the biggest themes in the market. Investors are watching both the potential for continued growth and whether the large amounts of money being invested in AI will eventually translate into higher profits.
• Geopolitical events remain important. Developments in the Middle East and relationships between major economies can affect oil prices, inflation, trade, and investor confidence.
• Also wanted to mention election years are historically volatile in the short-term but typically don’t impact longer term returns

Key Takeaways

The biggest lesson from 2026 so far is that markets can move dramatically in both directions.

We started the year with a significant decline. Q2 brought a powerful rebound. And Q3 has shown that markets can continue moving higher even when there are plenty of reasons for investors to feel uncertain.

This is exactly why having a diversified investment portfolio and a long-term plan is so important.

Trying to predict what the market will do next based on the latest headline can be difficult. Instead, we focus on making sure your investment strategy matches your goals, your timeline, and your comfort with risk.

As always, we encourage investors to stay focused on the long term, stay diversified, and avoid making emotional decisions based on short-term market movements.

We’ll continue watching the markets and keeping you informed as we head into the final quarter of 2026.

[Video Thumbnail Image Description: There is a cutout of a woman with brown hair in professional attire smiling at the camera. The background shows a red-tinted stock market graph with numbers in various places. There are rectangular boxes on the bottom right that are red and white. Text reads: “Quarterly Marketing Insights, Q3 2026, With Alicia Pittman.”]