Carlson Quarterly – Q3 2026

U.S. and global markets digested gains in the third quarter of 2026, though turbulence brewed underneath as investors wrestled with surging borrowing costs and soaring commodity prices. Following a blockbuster second quarter, equity benchmarks managed to grind out modest positive gains overall, despite facing heavy headwinds from the fixed-income market. The S&P 500 added a modest +2.53% for the quarter, while mega-cap technology strength continued to support broader indices through pockets of sector-specific volatility.

The primary driver behind market stress during Q3 was the aggressive resurgence of energy prices and persistent inflation pressures. Global oil prices climbed sharply as geopolitical tensions in the Middle East kept vital shipping lanes constrained, driving Brent crude toward the triple-digit mark. This energy shock kept inflation elevated and prompted the Federal Reserve—under newly appointed Chairman Kevin Warsh—to resume its tightening cycle, raising the target rate by a quarter point to a 3.75%–4.00% range in September.

The fixed-income landscape endured one of its most punishing stretches in recent years in response to shifting monetary policy, fiscal dominance concerns and a strong growth outlook. The 10-year U.S. Treasury yield surged sharply over 50 basis points during the quarter to peak near 5.29%, severely weighing on bond valuations and putting defensive, dividend-heavy equity sectors under pressure. Conversely, the high-flying small-cap segment relinquished some of its prior momentum, pulling back as climbing yields increased financing pressures on smaller businesses. Interestingly, Bitcoin started rallying from July lows, ending a brutal multi-month decline.

As the market transitions into the final stretch of the year, corporate earnings have emerged as the ultimate shock absorber. Early expectations for third-quarter earnings point toward robust double-digit growth, led heavily by semiconductor and digital infrastructure providers capitalizing on sustained Artificial Intelligence spending. With the U.S. midterm election cycle underway—a historical period typically marked by heightened pre-vote choppiness followed by a reliable fourth-quarter relief rally—investors remain focused on balancing solid fundamental earnings against a vigilant Federal Reserve and lingering energy volatility.

Check out our 3^rd quarter articles which explore the topics of international investing, financial planning, endowments, the 10-Year Rule, helping employees prepare for retirement and mutual fund tax history.

• Why International Investing Still Matters – With U.S. markets delivering impressive returns over the past 15 years, it has become easy for many investors to overlook international stocks. Read how international investing still plays in important role in building your portfolio.

• There’s No One-Size-Fits-All Investing & Financial Plan. That’s the Point! – Every individual, family, and institution we work with brings a different set of goals, concerns, and life experiences to the table. In our article we offer a few examples of how Carlson has helped guide clients in their unique financial journey.

• Why Endowments Win With a Long-Term Strategy – When markets become volatile or spending needs increase, even well-intentioned institutions can find themselves reacting to short-term events. An endowment’s purpose is to generate returns and provide ongoing financial support for an institution’s mission. Our article discusses how achieving that goal requires more than patience.

• The 10-Year Rule Explained: What IRA Beneficiaries Should Know – When Congress passed the SECURE Act in 2019, it changed one of the most important estate planning tools available to retirement account beneficiaries. For decades, many heirs could “stretch” inherited IRA distributions over their lifetimes. Today, most non-spouse beneficiaries face a much different reality: the 10-year rule. Learn all about what this rule means for you in our article.

• How to Help Employees Prepare for Retirement – As a small business owner, offering a retirement plan is an important employee benefit. Helping employees understand the plan and how it works makes that benefit truly valuable. With clear, consistent communication, employers can help employees feel more confident about planning for retirement while reinforcing the value of the benefits they provide.

• Buying Mutual Fund? Don’t Overlook Its Tax History – When evaluating a fund investment, most people tend to focus on manager quality, performance, and fees. In taxable accounts, however, there is another important consideration that often goes unnoticed in mutual fund investments: embedded capital gains.

Carlson Investments does not provide tax, legal, or accounting advice. This content has been written for informational purposes only. Always consult your individual tax, legal, or financial professionals for advice tailored to your situation.

Carlson Investments is a Concord, New Hampshire-based financial advisor and investment manager.