WEEKLY MARKET RECAP – September 11, 2026

The major U.S. stock indexes declined for a fourth consecutive session on Thursday before rebounding on Friday, helping limit losses during the holiday-shortened week. The S&P 500 and NASDAQ finished with fractional declines, while the Dow fell 1.6%.

Treasury yields climbed sharply as investors weighed persistent inflation pressures and the outlook for Federal Reserve policy. The 10-year Treasury yield closed Friday at 4.97%, its highest level since October 2023, when it briefly moved above 5.00% for the first time since 2007. The 2-year yield rose to 4.63%, its highest level in more than two years, while the 30-year yield reached 5.35%, near a two-decade high.

Oil prices eased on Friday but still posted a weekly gain of more than 8%. U.S. crude traded above $100 per barrel, its highest level in nearly four months and sharply above the roughly $70 level seen in early July. Despite the recent surge, prices remained below the year-to-date peak of nearly $113 reached in early April.

Inflation remained elevated ahead of the Federal Reserve’s upcoming policy meeting. The Consumer Price Index rose at a 3.4% annual rate in August, unchanged from July and still well above the Fed’s 2.0% target. A separate report showed that producer price inflation also increased in August from an already elevated July level.

Friday’s inflation data further strengthened expectations for a Federal Reserve rate hike at the meeting concluding Wednesday, September 16. According to CME FedWatch, futures markets indicated an 88% probability of a quarter-point increase in the Fed’s benchmark rate, up sharply from 59% just one week earlier.

Consumer sentiment deteriorated as concerns about inflation intensified. The University of Michigan’s preliminary Index of Consumer Sentiment fell to 47.8 in September from 51.7 in August and 55.2 in July. Despite the decline, sentiment remained above the record low of 44.8 reached in May 2026.

Elevated mortgage rates continued to pressure the U.S. housing market. Existing-home sales declined 2.0% in August from the previous month and were 1.2% lower than a year earlier, according to the National Association of Realtors. Housing supply, however, continued to improve, with inventory exceeding 1.6 million homes for the first time since 2019.

Small-cap stocks experienced considerably greater pressure than their large-cap counterparts as expectations for higher interest rates increased. The Russell 2000 fell 2.4% for the week, compared with a 0.9% decline for its large-cap counterpart, reflecting heightened sensitivity among smaller companies to rising borrowing costs.