WEEKLY MARKET RECAP – September 18, 2026

A modest rally on Thursday only partially offset the mostly negative trading sessions earlier in the week, leaving the S&P 500 with a fractional weekly decline for a second consecutive week. The Dow posted a larger 1.6% loss, while the NASDAQ edged slightly higher.

The U.S. Federal Reserve unanimously raised its benchmark interest rate on Wednesday for the first time since 2023, continuing the series of rate increases that began in response to the pandemic-era surge in inflation. The Fed’s latest projections showed that 16 of 18 policymakers expect at least one additional quarter-point rate hike by the end of the year.

The Fed’s decision put modest pressure on Treasury bonds, pushing yields higher, particularly on shorter-maturity securities. At Friday’s close, the 2-year Treasury yield stood at 4.76%, up from 4.63% the previous week. The 10-year yield edged higher to 5.01%, while the 30-year yield slipped slightly to 5.33%.

Oil prices remained volatile throughout the week. U.S. crude climbed above $106 per barrel on Tuesday before falling below $100 on Thursday and Friday. By Friday afternoon, oil was trading just under that level but remained near a four-month high following a recent surge driven largely by developments in the Middle East.

Japan’s central bank raised its benchmark interest rate to 1.25%, the highest level in more than three decades, in an effort to address persistent inflationary pressures. The quarter-point increase was approved Friday by a 7-2 vote and had been widely anticipated following recent weakness in the yen and similar monetary tightening by the U.S. Federal Reserve and European Central Bank.

The U.S. dollar strengthened following the Fed’s rate hike, reaching its highest level since late July against a basket of major currencies. By Friday afternoon, the dollar was up 1.1% for the week and about 2.0% year to date.

Large-cap growth stocks outperformed their value-oriented counterparts by a wide margin, narrowing some of value stocks’ year-to-date advantage. The growth benchmark gained about 0.9% for the week, while the value index declined 1.1%.

Higher interest rates also affected the U.S. housing market. The average 30-year fixed mortgage rate rose to 6.95% for the week ending Thursday, its highest level since January 2025 and up from 6.76% the previous week, according to Freddie Mac. The average rate reached 7.04% in January 2025.