From the Desk - Economic Commentary
Scott Hofer, Member Strategies Manager - 9/25/2026
U.S. stocks opened modestly higher this morning, with the S&P 500 and Dow up about 0.3% and the Nasdaq up 0.4%. Despite the gains, the Dow is on track for a fourth consecutive weekly loss, while the S&P 500 and Nasdaq are on track for a weekly gain of 1% and 2%, respectively. Economic resilience, falling oil prices, and easing market volatility appear to be helping equities move higher, in spite of elevated Treasury yields. Treasury yields continue to climb with the 10-year Treasury reaching its highest level since 2007 on Thursday and the 30-year yield reaching its highest level since 2004. This week’s increase in yields was driven by hawkish comments from Fed officials, elevated oil prices, and strong economic data. Fed funds futures trading suggests a roughly 66% likelihood of a rate hike in October, according to the CME FedWatch tool.
Regarding economic data releases today, U.S. durable goods orders were unchanged month-over-month in August, beating expectations for a modest decline, following a revised 0.9% increase in July. Transportation equipment was the main weakness, with orders falling 0.6%, but underlying demand remained stronger as orders excluding transportation rose 0.3%. Business investment indicators were also positive, with nondefense capital goods orders excluding aircraft increasing 1.6%, signaling continued corporate spending on equipment. In addition, manufacturers' unfilled orders increased 0.6% month-over-month and 8.8% year-over-year, suggesting a solid production pipeline. Overall, the report indicates that while headline factory demand was flat, core manufacturing activity and business investment remained resilient heading into the fourth quarter.
The University of Michigan’s final September 2026 Consumer Sentiment Index rose slightly from the preliminary reading to 48.1, topping expectations of 47.8, but remained down 7.0% from August's 51.7 and 12.7% below September 2025's 55.1. Consumer sentiment fell to its lowest level in four months as households grew increasingly concerned about high prices, rising fuel costs, and renewed trade tensions, while views of both current and future personal finances weakened. The expectations index declined to 46.3, down 10.1% month over month, indicating growing pessimism about future economic conditions. Inflation concerns intensified, with one-year inflation expectations increasing from 4.0% to 4.6%, the highest level since June, while long-run inflation expectations edged up to 3.4%. Survey Director Joanne Hsu noted that consumers across the political spectrum broadly agree that the economic outlook has weakened since the beginning of the year.
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