Pumpkin spice season is back, but markets were left with a bitter taste in September.
Markets were mixed but skewed negative during the month, as economic data remained mixed. Inflation continued to be stubborn, resulting in the Fed raising interest rates, causing consumer sentiment to slump amid concerns about rising borrowing costs and the path of the economy. However, strong earnings from large-cap tech companies provided a bright spot, helping keep broader markets from falling further.
The Nasdaq 100 was the clear leader, gaining 3.30% as large-cap tech stocks continued to deliver better than expected results. The S&P 500 held up relatively well thanks to its tech exposure, finishing nearly flat with a loss of 0.35%. However, the Dow Jones Industrial Average and CRSP US Small Cap Index weren’t as fortunate, falling 4.12% and 4.60% respectively, as smaller companies felt more pressure from higher rates. Growth outpaced value as a style for the month.
International markets followed a similar path lower, though without the boost from tech that helped support some US indices. Emerging markets fell 1.81%, while developed international stocks declined 2.93% as higher rates and weaker sentiment weighed on global markets.
Bonds also faced headwinds in September, as rising rates pressured prices. Aggregate US bonds dropped 2.61% as the 10-year Treasury yield soared from 4.75% to 5.29%. With inflation proving more persistent than hoped, the Fed raised its benchmark rate, and investors are now pricing in another potential hike in December. While fixed-income was impacted across the board, shorter-duration bonds held up better than their long-term counterparts.
September was a reminder that markets can shift quickly when the outlook for inflation and interest rates changes. While periods like this can feel uncomfortable, it’s important not to let short-term volatility drive long-term decisions. A diversified portfolio built around your goals, time horizon, and risk tolerance can help you stay disciplined and navigate changing market conditions with more confidence.
Look mom, no hands… or steering wheel… or pedals.
Tesla officially launched its Cybercab in Austin, Texas, adding the purpose-built robotaxi to a fleet that until now has been made up of Model Ys.
First unveiled as a prototype in 2024, the matte gold two-seater has butterfly doors and no steering wheel or pedals. The company estimates rides could eventually cost around 30 to 40 cents per mile, and says consumers will even be able to buy one down the road.
The stakes are high, as Tesla is refocusing its business around self-driving cars and robotics. However, it has plenty of ground to make up. Waymo operates roughly 4,000 driverless vehicles across 14 US cities, compared to just 500 vehicles in six cities for Tesla’s fully autonomous fleet.
While it’s a start, there are still plenty of miles to go before robotaxis become mainstream.
Put down the chatbot and pick up a pencil…
According to the OECD’s latest global education report, students who use AI regularly for schoolwork are scoring noticeably worse on exams than those who don’t.
The results come from the Program for International Student Assessment, which tested more than 760,000 15-year-olds across 91 countries.
Students who rarely or never used AI scored 509 on a test, compared to a score of 481 for those who used it almost daily. This works out to roughly a year and a half of schooling.
However, that doesn’t mean students should log off entirely. Those who used AI once or twice a week tended to outperform both heavy users and those who used it less often.
Apparently the best study buddy is still the one that makes you do some of the work yourself.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | -0.32% | 2.31% | 12.73% | 15.77% |
| NASDAQ (QQQ) | 3.32% | 0.56% | 20.83% | 23.80% |
| Large Cap Growth (VUG) | 2.22% | 4.71% | 11.18% | 13.21% |
| Large Cap Value (VTV) | -3.46% | -0.39% | 14.85% | 18.23% |
| Small Cap Growth (VBK) | -3.46% | -7.54% | 12.17% | 14.00% |
| Small Cap Value (VBR) | -5.40% | -4.51% | 10.69% | 12.88% |
| Developed International (VEA) | -2.93% | -0.65% | 14.10% | 20.97% |
| Emerging Markets (VWO) | -1.81% | -0.45% | 10.66% | 11.96% |
| REITs (VNQ) | -6.26% | -6.25% | 4.17% | 1.75% |
| Aggregate Bonds (BND) | -2.55% | -3.45% | -2.73% | -1.85% |
| Corporate Bonds (VCIT) | -3.02% | -4.06% | -3.44% | -2.33% |
| High Yield Bonds (JNK) | -2.91% | -2.14% | -0.28% | 1.07% |
| Long Term Treasuries (VGLT) | -4.97% | -8.04% | -7.33% | -7.71% |
| International Bonds (BNDX) | -1.18% | -2.51% | -1.17% | -0.88% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- Whether you’re feeling salty or sweet, October 7th is National Chocolate Covered Pretzel Day.
- Lightning can reach temperatures of 55,000 degrees Fahrenheit, which is about five times hotter than the surface of the Sun.
- Research suggests if you sleep poorly and wake up multiple times throughout the night you will be more likely to recall your dreams.
- Glass sponges can live for up to 15,000 years, making them one of the longest-living organisms on Earth.
– The Aspire Wealth Team
