Asset Management
09/08/2026 Market Strategy
September 08, 2026
Key Takeaways
Resilience remained the operative word for US economic data released last week with the non-farm payroll gain, the unemployment rate and the ISM surveys for both manufacturing and services pointing to an economy that remains resilient and, in our view, capable of withstanding challenges in a transitional environment.
For all the noise in and around the stateside market over much of this year, last Friday found the S&P 500 just 1% off from its most recent record high of 7798.99 reached on August 13.
Q2 earnings results continued to surprise significantly to the upside as earnings season winds down with just four companies left to report this week. That said, US and international stock indexes delivered mixed results last week as geopolitical risk and inflation concerns remained on the front burner.
With two thirds of Q3 and three fourths of the year near done, traders and investors return from the Labor Day holiday to focus on inflation data (CPI and PPI) scheduled for release this week with a focus on what effect they might have on next week’s FOMC interest rate decision.
For all the noise in and around the stateside market over much of this year, last Friday found the S&P 500 just 1% off from its recent record high of 7798.99 reached on August 13.
On a year-to-date basis, the S&P 500 is up 12.8% with 10 of its eleven sectors up as much as 41.6% (energy) to as little as 0.31% (utilities). Only one sector has delivered negative price performance: consumer discretionary, which is off 1.4%.
With Q2 earnings season finishing this week, profits reported so far are up 53.2% on back of 15.6% revenue growth.
Ten of the eleven sectors have reported positive earnings growth for the period with only one showing negative earnings growth (health care).
Of the 10 sectors posting positive earnings growth, two are at triple digit rates, seven are at double digit rates, one at a single digit rate. Earnings results thus far suggest to us that while the earnings growth was well diversified across the sectors, the equity market has not rewarded those sectors commensurate with their performance.
We continue to suggest that intermediate- and longer-term investors should not be surprised if the VIX (currently at relatively lower levels), jumps higher on near-term negative news items, creating some indigestion for the markets.
While bears, market skeptics, and nervous investors can make almost any piece of news seem like the coming of a bear market, the reality is that resilient fundamentals can provide positive offsets to counter such negative stories.
Investors with intermediate- and longer-term goals should, in our view, consider that the economic and corporate fundamentals that underpin revenue and earnings growth along with resilience in job growth and consumer spending could support the market to deliver positive moves ahead.
Notwithstanding periods when indicators seem to veer toward a patch of slowing--whether in jobs growth or consumer spending-- responsible monetary policy, experienced corporate managers, and innovation that can lead to substantial increases in productivity could well benefit investors practicing prudent diversification and patience.
In our view structural changes making monetary policy relatively quick to respond to risk and crisis along with the changing structures of innovation, demographics, consumer appetites and drivers of job postings have more often than not successfully countered bearish prognostication of disastrous results, pointing to greater opportunity than risk over the timeline of the markets since the beginning of the twenty first century.
In our view AI does not appear to be in a bubble similar to the tech bubble of the late 1990s. For one, the basic structure of this period of innovative and technological development and expansion is based on a globe accustomed to using highly sophisticated technology that is already deeply embedded in the lives of both business and the consumer.
The technology that inflated the bubble of 26 years ago was primitive in comparison to today’s technology, whether it was related to adaptation, efficiency, affordability or scale. The 1990s tech bubble featured a preponderance of new companies with inexperienced leadership drowned in burn rates tied to refinancing and dreams of “someday we’ll have a million eyeballs checking out our website.”
In comparison, a good number of hyper-scalers of today were among the companies that survived the tech bubble and have thrived since then--gathering millions, and even billions of businesses and consumers that they serve globally.
While challenges to progress will likely never cease--as change is usually an uncomfortable process--many of the hurdles ahead are likely to be traversable making the potential real risk ahead (when seen later in hindsight) to be failure to adapt to innovation and in getting left behind.
As a result, it is our view that the bond market may well be signaling that coupon rates may be normalizing in an economic environment that thus far has proven remarkably resilient.
For those who have been in the markets since before the Great Financial Crisis of 2008-09 and even longer, 10-year Treasury Notes yielding 4-5% don’t look dramatically high but nearer to the rate range that they may trade at for some time barring a recession (which at this juncture appears unlikely).
The bond market in our view continues to be doing the “heavy lifting” in rates allowing the Federal Reserve Board to keep its benchmark rate range in a band of 3.25%- 3.50% in place (and close to where it has been for some time) while remaining sensitive to its dual mandate guarding against untoward levels of inflation while keeping policy in favor of sustainable employment growth.
As a result, it is our view that the bond market may well be signaling that coupon rates may be normalizing in an economic environment that thus far has proven remarkably resilient.
For those who have been in the markets since before the Great Financial Crisis of 2008-09 and even longer, 10-year Treasury Notes yielding 4-5% don’t look dramatically high but nearer to the rate range that they may trade at for some time barring a recession.
We continue to suggest that intermediate- to long-term investors should avoid blindly buying the dips on market volatility but rather seek out the “babies that get thrown out with the bathwater” in market declines.
Diversification with an emphasis for quality remains key in our view to delivering positive results in an environment that remains highly transitional stateside and internationally.
An overhanging risk to the markets remains the hostilities between the US and Iran that remain a threat to stabilizing inflation and restoring sustainable economic growth globally.
Uncertainty in our view is always part and parcel of the markets just as in life. The key to navigating through it in our view remains to position assets with diversification, patience, and right-sized expectations.
Stay tuned.
Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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