Global Monthly Equities Report - September 2026

Executive Summary

Reporting period: 1 – 30 September 2026.

September priced a tightening cycle that the data immediately began to contradict. The Federal Reserve raised rates on 16 September for the first time in three years, a unanimous 25 basis points to 3.75–4.00%, with a dot plot showing sixteen of eighteen participants expecting at least one more. The entire Treasury curve moved 54 basis points: the two-year from 4.34% to 4.88%, the ten-year from 4.75% to 5.29%, and the thirty-year to 5.64%, its highest since June 2002. The two-to-ten spread finished the month at 41 basis points, exactly where it started — a parallel shift, not a repricing of the policy path alone.

The index-level damage looks trivial and was not. The S&P 500 fell 0.45% to 7,651.54 and the Nasdaq rose 1.86%, but the equal-weighted S&P 500 fell 4.83%, small caps 5.21% and the Dow 4.29%. The 4.50 percentage point gap between the cap-weighted and equal-weighted index is the widest of the year. Only Information Technology rose, at 5.08%. Financials fell 7.14% and Materials 7.15%, the two worst, as a rising cost of capital hit lenders and cyclicals together.

Then the evidence turned, and it turned after the month had closed its books. August core PCE on 30 September came in at 0.2% on the month and 3.0% year on year against 3.3% expected. September payrolls on 2 October added just 29,000 jobs against a forecast of 84,000, with 60,000 cut from the prior two months by revision, unemployment up to 4.2% and wage growth at 3.0%, the slowest since 2021. Market-implied odds of an October increase fell from roughly 64% at month-end to about 17%.