U.S. equities advanced last week, snapping a three-week losing streak, with the S&P 500 gaining 1.2%, the Nasdaq Composite rising 2.1%, and the Dow Jones Industrial Average adding 0.3%. Technology and semiconductor stocks led the market as enthusiasm surrounding artificial intelligence returned, helping the Nasdaq reach a record closing high during the week. Stocks remained resilient despite a sharp rise in Treasury yields, driven by stronger economic data and expectations that the Federal Reserve may raise rates again. The 10-year Treasury ended the week at 5.17%, up 16 basis points, after briefly reaching its highest level in approximately 19 years. Oil prices remained volatile but eased on Friday as negotiations raised hopes for progress toward ending the conflict with Iran. Although higher rates and energy costs remain meaningful risks, year-to-date equity returns are healthy, and economic activity continues to expand. We remain constructive on the economy and corporate earnings while emphasizing diversification, patience, and adherence to long-term investment plans.

U.S. & Global Economy

• U.S. business activity accelerated sharply in September. The preliminary S&P Global Composite PMI increased to 58.4 from 56.0, its strongest reading since July 2021. Services activity rose to 58.7, while the manufacturing index increased to 57.0. Readings above 50 indicate expansion. The surveys suggest that economic growth strengthened during the third quarter, supported by consumer demand and continued investment in artificial-intelligence infrastructure. However, stronger growth and persistent pricing pressures could keep the Federal Reserve focused on inflation and support additional rate increases.
• Other data were mixed but generally constructive. Durable-goods orders were unchanged in August after rising 0.9% in July, but core capital-goods orders, a measure of business investment, jumped 1.6%. New-home sales increased 6.4% to an annualized rate of 684,000, the highest level since December, as builders used price reductions and incentives to attract buyers. Initial unemployment claims declined to 197,000, indicating that layoffs remain low. Consumer sentiment weakened to 48.1 from 51.7; however, one-year inflation expectations increased to 4.6%. The contrast between solid spending and weak confidence illustrates the pressure households continue to feel from higher prices.
• International data also reflected resilient growth and renewed inflation concerns. The Eurozone Composite PMI increased to 53.1 from 52.0, its strongest reading since April 2023. Norway and South Africa raised interest rates by 25 basis points, while Sweden and Switzerland left their policy rates unchanged but maintained cautious guidance. The decisions show how higher energy costs are producing increasingly divergent monetary policy responses across countries.

Policy and Politics

• Presidents Trump and Xi met in Washington and agreed to extend the U.S.-China trade truce for two months. The extension prevents tariffs from returning to the much higher levels reached during the 2025 trade dispute, but it does not resolve disagreements involving agricultural purchases, rare-earth supplies, technology restrictions, and Taiwan. Discussions also included artificial-intelligence safety and possible communication procedures for significant AI-related incidents. The temporary extension reduces an immediate risk to global trade but leaves businesses facing continued policy uncertainty.
• U.S. and Iranian negotiators explored a phased agreement under which Iran would reopen the Strait of Hormuz and the United States would ease its economic blockade. The negotiations contributed to lower oil prices on Friday, with West Texas Intermediate crude settling at $92.41 per barrel and Brent at $104.32 per barrel. Significant obstacles remain, and attacks by Iran-aligned Houthi forces against Saudi infrastructure continue to threaten regional energy supplies. Progress toward restoring normal shipping would provide meaningful relief for inflation and consumers, while renewed escalation could quickly reverse the recent improvement in oil prices.

The September employment report will be the primary focus this week. Investors will examine payroll growth, unemployment, wage gains, and hours worked for evidence that the labor market remains healthy without adding further inflation pressure. The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures Price Index, will be released on Wednesday. JOLTS job openings, consumer confidence, the ISM Manufacturing Index, construction spending, and the final estimate of second-quarter GDP will provide additional information about economic momentum. Carnival, Micron, Accenture, and Nike are among the more prominent companies scheduled to report earnings.

Markets are likely to remain sensitive to Treasury yields, oil prices, Federal Reserve expectations, and developments in the Middle East. Strong business investment, low unemployment claims, improving business activity, and healthy corporate profits remain important sources of support. At the same time, long-term Treasury yields above 5%, elevated mortgage rates, and uncertain energy supplies could gradually weigh on demand. Periodic volatility is normal following strong year-to-date equity gains. We continue to believe investors are best served by remaining diversified, disciplined, and focused on their long-term investment plans rather than reacting to short-term headlines. As always, please contact your team at Valley National Financial Advisors with any questions.

Economic Numbers to Watch This Week

• U.S. Dallas Fed Manufacturing Index for September 2026, prior 11.6
• U.S. S&P CoreLogic Case-Shiller Home Price Index, July 2026, prior 2.1% year over year
• U.S. JOLTS Job Openings for August 2026, prior 7.271 million
• U.S. Conference Board Consumer Confidence Index for September 2026, prior 89.4
• U.S. ADP Employment Change for September 2026, prior 38,000
• U.S. PCE Price Index for August 2026, prior 3.7% year over year; core prior 3.3%
• U.S. second-quarter 2026 GDP final estimate, second estimate 1.5% annualized
• U.S. Personal Income and Spending for August 2026, prior 0.4% and 0.2%, respectively
• U.S. Chicago PMI for September 2026, prior 47.1
• U.S. Weekly Jobless Claims for September 26, 2026, prior 197,000
• U.S. ISM Manufacturing Index for September 2026, prior 54.6
• U.S. Employment Report for September 2026, prior payrolls 162,000; unemployment 4.1%
• U.S. Factory Orders for August 2026, prior 0.9%

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