Blog
The Markets
The bond market isn’t happy.
The United States Treasury market is the biggest and most liquid government bond market in the world.1 Throughout 2026, rates on U.S. Treasuries have increased. The benchmark 10-year Treasury started the year at 4.2 percent and ended last week at 4.8 percent. The 2-year Treasury note rose more sharply, from 3.6 percent in January to 4.5 percent last week.2
Rates move higher for a variety of reasons. Alex Rosenberg, Karishma Vanjani, and Martin Baccardax of Barron’s reported on the primary drivers for 2026, which include:
- Sticky inflation. When prices rise, lenders demand higher yields to protect the value of the money they’ll be repaid in the future. In addition, the Federal Reserve has signaled it will keep interest rates high until inflation returns to its 2 percent target.3
- Rising government debt. The U.S. government finances its debts by issuing Treasuries. Higher debt means more Treasuries are sold. The growing supply of Treasuries puts upward pressure on rates.3
- Growing competition from corporate bonds. U.S. companies have been issuing a lot of high-quality bonds to support new projects. The flood of new bonds also pushes rates higher.3
The U.S. is not alone. Rates on government bonds have been rising in countries around the world.3
Higher Treasury rates affect investors and consumers
Rising rates are good news and bad news. The bad news for bondholders is the inverse relationship between interest rates and prices. As rates rise, bond prices fall.4 The good news is that income-oriented investors can purchase bonds with rates that are higher than they’ve been in a long time.
The stinger for consumers is that the 10-year Treasury is the benchmark rate for mortgage rates. In addition, Treasuries influence rates on auto loans and credit cards. When rates rise, borrowing typically becomes more expensive.5 On the plus side, higher rates usually help bring inflation lower.6
Last week, major U.S. stock indexes delivered mixed performance. The Standard & Poor’s 500 Index and Nasdaq Composite were flat, while the Dow Jones Industrial Average declined.7 Yields on most intermediate and longer maturities of U.S. Treasuries ticked higher.2
Data as of 9/4/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.1% | 12.8% | 18.7% | 19.7% | 11.3% | 13.4% |
| Dow Jones Global ex-U.S. Index | 0.0 | 15.0 | 24.3 | 16.9 | 5.9 | 6.8 |
| 10-year Treasury Note (yield only) | 4.8 | N/A | 4.2 | 4.3 | 1.4 | 1.5 |
| S&P GSCI Gold Index | -1.2 | 3.1 | 24.1 | 31.9 | 20.0 | 12.7 |
| Bloomberg Commodity Index | 1.9 | 30.3 | 39.0 | 10.2 | 8.3 | 5.5 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHAT DO YOU KNOW ABOUT THE ECONOMIC MENAGERIE? If you’ve ever listened to the financial news, you know that pundits frequently rely on animal metaphors to communicate their points. Bull and bear markets are a case in point. Bulls charge forward and thrust their horns up on the attack, while bears employ downward paw strikes. Bull markets trend higher, while bear markets trend lower. Both animals are unpredictable and strong; volatile like financial markets can be.8 See what you know about the animal metaphors Wall Street relies on by taking this brief quiz.
- Economist John Maynard Keynes believed that people’s instincts and emotions influence their behavior and financial choices. He argued that we spend or invest based on our outlook for the future, and that emotional urges drive economic booms and busts.9 What term did he use to describe this idea?
- A. Herd mentality
- B. Market mood swings
- C. Animal spirits
- D. Bullish instincts
- A central banker who favors moving interest rates higher to fight inflation or cool the economy is known as a hawk.10 What is the term used to describe someone who favors moving interest rates lower to spur economic growth?
- A. A meercat
- B. A dove
- C. A chickadee
- D. A mouse
- There are two theories about investors and dividends. One holds that stock investors are indifferent to whether gains come from stock dividends or gains. The other says that investors prefer dividend-paying stocks because dividends are generally stable and make returns more predictable.11 What is the latter theory called?
- A. The Bird-In-Hand Theory
- B. The Nest Egg Theory
- C. The Cash Cow Theory
- D. The Fishbone Theory
- In business, a company becomes a “unicorn” when it reaches a certain milestone.12 What is that milestone?
- A. A valuation of $1 billion or more
- B. Annual profits of $100 million or more
- C. Annual sales of $100 million or more
- D. A stock price of $5,000
If you have questions about bulls, bears, or other financial jargon, let us know. We’re happy to translate.
WEEKLY FOCUS – THINK ABOUT IT
“An expert is a person who has made all the mistakes that can be made in a very narrow field.”13
― Neils Bohr, Physicist
Answers: 1) c; 2) b; 3) a; 4) a
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.axios.com/2026/08/31/bonds-yields-wigglesworth-book
3 https://www.barrons.com/articles/bond-market-strategy-rising-yields-portfolio-c278240d or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-08-26-Barrons-Death-of-a-Safe-Haven%203.pdf
4 https://www.investopedia.com/terms/b/bond.asp
5 https://www.minneapolisfed.org/article/2025/what-drives-consumer-interest-rates
6 https://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
7 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-08-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
8 https://www.investopedia.com/ask/answers/bull-bear-market-names/
10 https://www.kansascityfed.org/research/economic-bulletin/understanding-hawks-and-doves-2018/
11 https://www.investopedia.com/terms/b/bird-in-hand.asp
12 https://www.gsb.stanford.edu/insights/explainer-what-unicorn
13 https://www.goodreads.com/quotes/5-an-expert-is-a-person-who-has-made-all-the
I’ve been trying to better understand all the controversy surrounding data centers—the electricity they consume, water use, utility costs, and what they may mean for our communities. Well, I went down a rabbit hole, and I discovered that I’ve been thinking about data centers too narrowly. The AI boom isn’t simply a data-center story, it’s an enormous infrastructure story. I had wondered whether some of the answers might be to put more infrastructure underground, or even in space. As it turns out, there’s some truth to both, just not quite the way I thought.
Starlink and others are developing “direct-to-cell” technology that allows satellites in low-Earth orbit to communicate directly with ordinary cell phones. In simple terms, we’re beginning to put something resembling cell towers in space. Pretty amazing, but here’s the distinction I hadn’t appreciated: Moving communications into space doesn’t move the data centers, or their enormous appetite for electricity, off the ground. In fact, AI is creating a tremendous need for more infrastructure here on Earth: power generation, transmission lines, substations, transformers, and miles of cable.
So why not put all those power lines underground? Turns out that’s not quite the answer either. Underground can make sense in certain places and can protect critical infrastructure, but burying the entire electrical grid would be extraordinarily expensive and impractical. The more likely future is much more interesting: more communications capability in space, while simultaneously building a much bigger, stronger and smarter electrical grid on the ground, with selective undergrounding where it makes sense.
This changed the data-center debate for me. Maybe the question isn’t simply, “Do we want data centers?” Maybe we should also be asking, “Where will all this new electricity come from? Who will build the infrastructure to deliver it? Who will pay for it? And how do we make sure ordinary utility customers aren’t left unfairly footing the bill?”
And then, inevitably, my investor brain kicked in. Wall Street is already well aware of this story, so I’m apparently a little late to that party, but it gave me a different way to think about AI. I’ve spent so much time hearing about who will win the AI race that I haven’t stopped to think about everything all those competitors are going to need, regardless of who wins. Somebody must generate the electricity, move it, build the substations and transformers, manufacture the cable, and increasingly, provide communications infrastructure from space.
That’s the rabbit hole I found particularly fascinating. Sometimes the more interesting question isn’t who will win the race. It’s what everyone in the race is going to have to buy.
From Lynn’s Desk
The Markets
Artificial intelligence (AI) is driving the market and the economy.
Last week, markets experienced a burst of AI enthusiasm after a leading chip manufacturer’s earnings report exceeded expectations. The company anticipates revenue will grow by 70 percent over the coming year. Its shares advanced, as did shares of other AI-related stocks.1
“The S&P 500 Index ended the session 0.7 percent higher…Meanwhile, the equal-weight version of the benchmark declined 0.3 percent, a reflection of the number of stocks falling despite tech’s strength,” reported Geoffrey Morgan of Bloomberg.1
While investors cheered AI growth expectations, the Federal Reserve (Fed) considered what it means for inflation. Prices continue to increase faster than the Fed’s two percent per year target. Strong economic growth could make it harder to bring prices under control. In a speech last week, Fed Chair Warsh stated,
“Business capital expenditures—the seed corn of future economic growth—are rising rapidly… For firms in the S&P 500, profits have grown by more than 20 percent over the past year…But on the price-stability side of our mandate, the numbers are more concerning. The Fed’s preferred measure of inflation, the 12-month change in the PCE price index, stands at 3.7 percent, while the six-month change is 4.1 percent…Inflation is running above our 2 percent target. So the Fed’s predominant focus right now should be on prices.”2
That commitment complicates the outlook for interest rates. AI is contributing to a surge in business investment, fueling economic growth. Faster growth is good for the economy overall, but it can make the Fed’s job of keeping prices stable more difficult. To bring inflation lower, the Fed may have to raise the federal funds rate. “As a rule of thumb, interest rates often need to be high enough to limit borrowing and spending to cool inflation,” reported Christopher Rugaber of the AP.3
Last week, major U.S. stock indexes finished higher, although they gave back some gains late in the week.4 Yields on shorter maturities of U.S. Treasuries rose “in anticipation of rate increases as soon as next month,” reported Reuters.5 In contrast, yields on longer maturities moved lower.6
Data as of 8/28/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.5% | 12.7% | 18.6% | 20.3% | 11.2% | 13.5% |
| Dow Jones Global ex-U.S. Index | 0.2 | 15.1 | 23.4 | 17.6 | 6.4 | 7.0 |
| 10-year Treasury Note (yield only) | 4.7 | N/A | 4.2 | 4.2 | 1.3 | 1.6 |
| S&P GSCI Gold Index | -3.2 | 4.4 | 30.4 | 32.5 | 20.1 | 13.1 |
| Bloomberg Commodity Index | -0.2 | 27.8 | 37.5 | 9.9 | 7.8 | 5.2 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
HOW FAR WILL YOUR RETIREMENT SAVINGS TAKE YOU? All vehicles are not created equal. A tank of gas will take a fuel-efficient or hybrid vehicle a lot further than it will take a gas guzzler. Retirement savings work in a similar way. Two people can retire with identical amounts of savings, yet the income they generate (and how long that income lasts) may be quite different.
A key issue is taxes.
“Millions of Americans spend decades saving for retirement only to trip over tax bills at the finish line. The shift from earning a paycheck to living off savings creates a new problem: figuring out how to turn assets into income without handing more than necessary to the IRS,” reported Suzanne Woolley of Bloomberg.7
Fortunately, there are strategies that can help improve your tax efficiency. (Tax efficiency is making financial decisions that minimize your taxes.) Here are some points to consider:
- Your retirement income strategy should reflect you. Your strategy should be tailored to you. It will depend on the amount of savings you’ve accumulated, the types of accounts you have (taxable, tax-deferred, and tax-free), and the amount of income you need each year in retirement.
- Different types of accounts have different tax consequences. Your retirement savings may be in traditional retirement accounts (401ks and IRAs), Roth accounts, and taxable investment accounts. The tax consequences of withdrawals vary by account type, so retirees’ decisions about where to take income directly affect the amount of tax owed. Making thoughtful decisions about withdrawals can help reduce the amount of taxes paid in retirement.
- Roth accounts deliver tax-free income. Retirees may want to consider converting traditional retirement accounts to Roth IRAs. Income from Roth accounts is typically tax-free, as long as certain conditions are met. In contrast, income from traditional 401(k) and IRA accounts is usually taxable. In addition, when assets are in a Roth IRA, any future growth may be tax-free.
If an account owner moves money from a traditional account to a Roth IRA, the amount converted is generally taxed as ordinary income. Consequently, it’s important to consider whether the amount will push the taxpayer into a higher tax bracket. In general, Roth conversions are most beneficial during years when account owners are in lower tax brackets.8
- Withdrawals from retirement accounts are required in your 70s. At age 73, the IRS requires Americans to begin taking required minimum distributions (RMDs) from traditional retirement accounts. (The age is 75 if you were born in 1960 or later.)
In some cases, RMDs exceed the amount retirees need for income during the year. When that happens, these distributions can be invested or donated to a qualified charity. The amount donated counts toward the RMD, but it isn’t included in taxable income.9
The goal of retirement income planning is to have your savings provide income for as long as you may need it. If you have any questions, please get in touch.
This article has been prepared for informational purposes only. It is not intended to provide tax, legal or accounting advice. You should talk with your tax, legal and accounting advisors before engaging in any transaction.
WEEKLY FOCUS – THINK ABOUT IT
“Old age is like everything else. To make a success of it, you’ve got to start young.”10
― Theodore Roosevelt, 26th President of the United States
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.bloomberg.com/news/articles/2026-08-27/us-stock-futures-climb-as-nvidia-s-outlook-lifts-tech-sector or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-31-26-Bloomberg-S&P-500-Advances%20-%201.pdf
2 https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm?utm_source=chatgpt.com
4 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-31-26-Barrons-DJIA-S&P-Nasdaq%20-%204.pdf
5 https://www.reuters.com/business/view-rate-hike-expectations-rise-warsh-speech-jackson-hole-2026-08-28/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-31-26-Reuters-View-Rate-Hike-Expectations%20-%205.pdf
6 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView
7 https://www.bloomberg.com/news/articles/2026-05-11/retirement-tax-traps-avoid-mistakes-with-401-k-s-iras-social-security or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-31-26-Bloomberg-The-Most-Common-Tax-Traps%20-%207.pdf
9 https://www.schwab.com/learn/story/reducing-rmds-with-qcds
The Markets
Investors may have a rosier view of the future than consumers do.
In 2026, markets have been volatile with major U.S. stock indexes posting new highs and new lows. “The S&P [Standard & Poor’s] 500 posted 30 new highs and one new low; the Nasdaq recorded 155 new highs and 85 new lows,” reported Noel Randewich and Avinash P. of Reuters in mid-August.1
The ups and downs of the market reflect investor enthusiasm and uncertainty. In general, investors make decisions about what they believe will happen in the future. They weigh the possible effects of geopolitics, artificial intelligence (AI), and other factors on companies and the economy and act on their view.
While investors ponder the future, consumers (people who buy goods and services) think about the here and now. For months, consumer sentiment has hovered near all-time lows. In April 2026, anxiety about the war in Iran left Americans in the worst economic mood in the 50-year history of the University of Michigan’s Index of Consumer Sentiment, according to Matt Grossman of the Wall Street Journal.2
The mood declined further in May, falling to an all-time low of 44.8, before improving in June and July. In August, sentiment fell again.3,4 Since 1952, the historic average for the survey has been 84.5.5
| 2026 | August | July | June | May | April |
| Index of Consumer Sentiment | 51.0 | 55.2 | 49.5 | 44.8 | 49.8 |
| Current Economic Conditions | 51.8 | 54.8 | 47.7 | 45.8 | 52.5 |
| Index of Consumer Expectations | 50.6 | 55.4 | 50.7 | 44.1 | 48.1 |
Sources: University of Michigan Consumer Sentiment Survey4
The last drop in sentiment was driven by the Index for Consumer Expectations.3 It is a relatively small component of the entire survey that measures how consumers view prospects for:6
- Their own financial situation,
- The economy over the near term, and
- The economy over the long term.
“Across all consumers, only 8 percent [of survey participants] expect their income growth to exceed inflation in the year ahead, down from 18 percent in December 2024, a reflection of the belief that high prices will continue to be burdensome” wrote Surveys of Consumers Director Joanne Hsu.3
Consumers are worried about their standard of living and whether wages will keep pace with inflation, while investors are focused on what companies and the economy may deliver in the future.
Last week, major U.S. stock indexes finished lower as investors pondered higher bond yields and the government’s efforts to bring them lower.7 “The problem is none of these actions are targeting the root problem: the $40 trillion U.S. national debt. Bessent is temporarily stemming the momentum, but not changing the fundamentals. The other problem is that the economy is strong and is expected to keep humming along—until the Federal Reserve hikes interest rates,” reported Karishma Vanjani of Barron’s.8 The yield on the 30-year U.S. Treasury bond ended the week at 5.27 percent.9
Data as of 8/21/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -1.4% | 12.1% | 20.5% | 20.4% | 11.4% | 13.4% |
| Dow Jones Global ex-U.S. Index | -0.1 | 14.9 | 23.6 | 18.0 | 6.8 | 6.8 |
| 10-year Treasury Note (yield only) | 4.7 | N/A | 4.3 | 4.3 | 1.3 | 1.5 |
| S&P GSCI Gold Index | 5.5 | 7.8 | 38.4 | 34.5 | 21.0 | 13.3 |
| Bloomberg Commodity Index | 3.8 | 28.1 | 39.1 | 10.5 | 8.6 | 5.1 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
DOES THE STOCK MARKET REFLECT THE WORLD AROUND US? Often, the answer is no. “[T]he stock market aims to capture investors’ best collective guess at tomorrow’s equity reality. It mirrors today’s only when the future is likely to look much like the present,” explained The Economist.10
Markets don’t expect the future to look like the present. In part, that’s because of AI. No one is certain what an AI future looks like. “At one extreme is the utopian view that AI will cause runaway economic growth, accelerate scientific research and perhaps make humans immortal. At the other extreme is the dystopian view that AI will cause abrupt, widespread job losses and economic disruption, and perhaps go rogue and wipe out humanity,” reported The Economist.11
There is a middle ground view, as well, but it “is less dramatic than predictions of an imminent ‘fast take-off’ or apocalypse, so tends not to receive much attention.”10
AI stocks have an outsized effect on stock markets right now
Investors are confident AI will have a significant impact on the world economy, even if they don’t know what it will be. As a result, a few AI-related stocks are dominating performance in some stock indexes. The Economist explained:10
“[T]he S&P 500 and the world’s other benchmark indices are no longer the real stock market, either. Rather than mirroring the universe of domestic equities, they increasingly reflect the fortunes of a few corporate giants, which in turn mostly rise and fall with the unstable outlook for the artificial-intelligence revolution. This is making many benchmarks—and, by extension, the stock portfolios and pension pots of investors everywhere—considerably more volatile.”10
Investors are looking beyond today’s economy and trying to put a value on what they believe tomorrow’s economy could become. It’s an important distinction. A strong stock market does not necessarily mean the economy is thriving, just as a weak stock market does not necessarily mean the economy is struggling. Stock prices reflect expectations and expectations can change, sometimes quickly.
WEEKLY FOCUS – THINK ABOUT IT
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.12 ― Sam Ewing, Writer and humorist
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.reuters.com/business/retail-consumer/wall-st-futures-tick-higher-oil-retreats-ahead-inflation-data-2026-08-13/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Reuters-S&P-Notches-Record-High%20-%201.pdf
2 https://www.wsj.com/economy/consumers/aprils-consumer-sentiment-is-the-lowest-on-record-66652d01 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-WSJ-Aprils-Consumer-Sentiment%20-%202.pdf
3 https://www.sca.isr.umich.edu
4 https://www.sca.isr.umich.edu/files/tbmics.pdf and https://data.sca.isr.umich.edu/fetchdoc.php?docid=81440
5 https://data.sca.isr.umich.edu/tables.php [See pdf] or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Index-of-Consumer-Sentiment%20-%205.pdf
6 https://data.sca.isr.umich.edu/survey-description.php
7 https://www.barrons.com/market-data or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
8 https://www.barrons.com/articles/bessent-treasury-bonds-yields-buybacks-bf9fa1c4?eafs_enabled=false or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Barrons-Bessents-Surprise-Interventions%20-%208.pdf
10 https://www.economist.com/finance-and-economics/2026/08/18/stock-indices-no-longer-reflect-equity-reality or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Economist-Stock-Indices-No-Longer-Reflect%20-%2010.pdf
11 https://www.economist.com/finance-and-economics/2025/09/04/what-if-artificial-intelligence-is-just-a-normal-technology or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-24-26-Economist-What-If-Articifial-Intelligence%20-%2011.pdf