Market Recap & Q4 Outlook: Rates, Oil and the Midterms

Oil topped $100/bbl in September and is still the key swing factor for how far the Fed may push rates before year-end. The Fed raised interest rates for the first time since July 2023, signaling one more hike and keeping markets in a “higher for longer” mindset. Treasury yields surged, with the 10-year Treasury closing above 5% for the first time since 2007. Bond, corporate, and municipal yields became especially attractive, while equity leadership narrowed: the S&P 500 hit a record high, but small caps fell nearly 8%. S&P 500 profits are up nearly 30% over the past year, helping stocks absorb tighter conditions.