Third Quarter Commentary

• U.S. equity markets produced mixed results during the quarter as resilient economic growth and strong corporate earnings were offset by rising interest rates, persistent inflation, and renewed geopolitical tensions. Continued enthusiasm surrounding artificial intelligence supported large-cap technology stocks, while higher Treasury yields and narrowing market breadth weighed more heavily on smaller-cap equities. Large-cap equities, represented by the S&P 500, returned 2.3%, while the “Magnificent 7” gained 11.4%. Mid-cap & small-cap equities faced greater pressure, as the Russell 2500 fell -6.4% for the quarter, while the Russell 2000 finished the quarter down -7.2%.
• International developed and emerging markets equities were roughly flat during the quarter as renewed geopolitical tensions, higher energy prices, and rising interest rates weighed on investor sentiment. Durable economic activity and solid corporate earnings supported developed markets, while emerging markets faced pressure as the earlier technology-led rally moderated. Firmer commodity prices provided some support, contributing to uneven performance across regions and sectors. The MSCI EAFE Index returned 0.8% for the quarter, while emerging market securities lagged with the MSCI EM index losing -0.4%.
• The U.S. Federal Reserve raised the federal funds rate to a target range of 3.75% - 4.00% at the FOMC’s final meeting of the third quarter. FOMC Chair Kevin Warsh continued to emphasize the Fed's commitment to restoring price stability, and reiterated the Fed’s attentiveness to the effects of geopolitical developments overseas and maintaining strength in the labor market. Current FOMC projections indicate overwhelming support for at least one additional 25 basis point hike in 2026, with
  four of the 18 members seeing two or more as possible.
• During the quarter, the yield curve shifted meaningfully higher and moderately steepened, driven by elevated inflation expectations, increased long-term debt issuance tied to AI, fiscal concerns, and tighter Fed policy.

To view the third quarter reports, click on the links below: 

• 3Q26 Global Positioning Statement
• 3Q26 Global Equity Review
• 3Q26 Taxable Fixed Income Review
• 3Q26 Tax Exempt Fixed Income Review
• 3Q26 Real Assets Review
• 3Q26 Private Credit Review