Quarterly Investment Letter – Q3 2026

Turning the Corner Toward the Fourth Quarter

October 2, 2026

As the third quarter comes to a close and we prepare for the final few months of 2026, investors continue to navigate an unusually complex environment. The November midterm elections will add another layer of uncertainty to an already complicated backdrop, but the primary issues driving financial markets remain economic and geopolitical.

The situation in the Middle East, including the potential impact on oil production and shipping through the Strait of Hormuz, remains an important consideration for investors. Oil prices have been volatile as markets react to developments in the region. As of September 30, West Texas Intermediate crude was trading near $90 per barrel and Brent crude near $97 per barrel.

Inflation also remains a central part of the economic picture. While it has moderated from earlier peaks, price pressures remain evident in areas such as healthcare, food and transportation. The Federal Reserve responded at its September 16 meeting by raising the federal funds target range by 25 basis points, to 3.75%–4.00%. This was the Fed’s first rate increase since 2023, and policymakers’ projections suggest one additional increase is possible before year-end. There was encouraging news to wrap up the quarter, however: the latest Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, showed a 3.4% annual increase, below the 3.7% economists had expected.

The Stock Market

Although headlines throughout the quarter focused heavily on geopolitical developments, oil prices, the Federal Reserve and the Trump administration, the performance of high-quality companies continued to demonstrate the importance of staying focused on underlying business fundamentals.

Through September 29, the S&P 500 was approximately 2% higher for the third quarter and 12.1% higher year to date. The index closed September 29 at 7,670, roughly 2% below its record high. Rising Treasury yields weighed on stocks late in the quarter, leaving the index roughly flat for the month of September.

The quarter included both sharp down days and quiet sessions in which the market moved very little. Importantly, the market’s resilience in the face of considerable geopolitical and economic uncertainty reflects continued confidence in corporate earnings and the underlying strength of many U.S. businesses.

Fixed Income

The fixed-income environment was more challenging. Rising inflation expectations, higher oil prices and the Fed’s rate increase pushed Treasury yields to multi-decade highs late in the quarter. On September 29, the 10-year Treasury yield stood at approximately 5.26%, its highest level since 2007, while the 30-year yield approached 5.6%, a level last seen in 2002. Because bond prices move inversely to yields, this created meaningful headwinds for bond returns.

The Bloomberg U.S. Aggregate Bond Index, the broad benchmark for investment-grade bonds, declined approximately 3.85% for the third quarter and is down approximately 2.8% year to date.

At the same time, higher yields provide an important benefit to investors adding new money to fixed income. The broad investment-grade bond market now yields above 5%, considerably more income than was available during the low-interest-rate environment of the past decade.

Looking Ahead

As we begin the fourth quarter, we believe the investment environment calls for continued discipline rather than dramatic changes in portfolio positioning.

CRR allocations remain balanced, with an emphasis on high-quality companies capable of participating in the continued growth of the U.S. economy. We remain particularly focused on companies benefiting from capital investment in artificial intelligence, semiconductors, software and data infrastructure, while also maintaining exposure to important areas of the broader economy, including industrial tools and equipment, pharmaceuticals, transportation and other essential businesses. Continued investment in AI and semiconductor infrastructure represents a significant source of corporate capital spending, while strong earnings growth across other areas of the economy provides an important counterbalance to the market’s concentration in technology.

Our objective remains the same: maintain diversified portfolios, focus on quality, take advantage of opportunities when they arise, and avoid allowing short-term headlines to dictate long-term investment decisions. While market choppiness may have increased this year, periods like this reiterate the importance of our investment approach that remains rooted in company fundamentals and competitive positioning.

In the months ahead, we will continue to monitor interest rates, inflation, energy markets, corporate earnings, geopolitical developments, and the job market while keeping our focus on the long-term objectives of each CRR client.

Disclosures: Investment Advisory services are provided through BlueDoor Private Wealth, LLC. an SEC registered Investment Advisor.  For complete disclosures please visit SEC.gov or bluedoorprivate.com. Past performance is not indicative of future results and as