Columbus Wealth Management Quarterly Update – 2026 Q3
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Market Update & Investment Commentary
Data as of 09/30/2026 (unless stated otherwise)
U.S. Markets
U.S. equity markets posted modest gains during the third quarter, extending the strong rebound that began in the spring. Performance beneath the surface was less uniform. Large technology and artificial intelligence-related companies remained influential, while rising interest rates and energy prices challenged interest-rate-sensitive areas of the market. Corporate earnings remained an important source of support, with strength extending beyond companies that develop AI models to semiconductors, data centers, electrical equipment, power generation, cooling systems, and other infrastructure. As the index returns shown above indicate, U.S. large-cap value stocks, represented by the Russell 1000 Value Index, and U.S. small-cap stocks, represented by the S&P 600 Index, have been the strongest performers so far this year. We continue to maintain a slight portfolio tilt toward value and small-cap securities.
The third quarter was more difficult for many bond investors as Treasury yields moved higher. Rising yields generally reduce the market value of existing bonds in the short term, particularly bonds with longer maturities. At the same time, higher yields increase the income available on newly purchased bonds and on proceeds that are reinvested. Core bonds have historically produced positive returns in 21 of the 25 negative S&P 500 years over the past century.
International Markets
International markets have performed well year to date, although third-quarter results were mixed. Renewed concerns about Middle Eastern energy supplies drove oil prices materially higher, increasing inflation expectations and bond yields. Higher oil prices raise gasoline, heating, and transportation costs for consumers and increase freight, manufacturing, and other input costs for businesses. While developed markets faced these pressures, parts of emerging markets continued to benefit from semiconductor demand and AI-related capital spending.
Economy
On September 16, the Federal Open Market Committee increased the federal funds target range by 0.25 percentage point to 3.75%–4.00%. The committee described economic activity as expanding at a solid pace, supported by resilient domestic spending, strong productivity growth, and robust capital investment, while noting that inflation remained elevated. The increase marked a departure from the holding pattern earlier in the year. Rather than trying to predict the next policy decision, we believe it is more useful to focus on the factors the Federal Reserve has identified: inflation, labor-market conditions, economic activity, and incoming financial data.
Inflation remained a central focus during the quarter. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index rose 0.4% in August and 3.4% over the prior 12 months. Core CPI, which excludes food and energy, rose 0.3% in August and 2.4% over the prior year. Higher energy prices pushed headline inflation above the core measure, which showed less underlying price pressure. Although neither measure captures every household’s experience, reviewing both helps distinguish broad price trends from more volatile food and energy movements. Inflation has declined substantially from its post-pandemic peak, but recent data show that progress toward the Federal Reserve’s 2% objective remains uneven, particularly when commodity and energy prices are volatile.
Nonfarm payrolls increased by 29,000 in September, compared with expectations of 90,000, while the unemployment rate rose to 4.2% from 4.1%. Together with the slower pace of hiring, these figures suggest that labor-market conditions are cooling. However, the unemployment rate remains relatively low, indicating a labor market that has weakened but is not broadly distressed.
The third estimate from the U.S. Bureau of Economic Analysis showed that real gross domestic product increased at a 2.2% annualized rate in the second quarter. Consumer spending, investment, and exports contributed to the increase, while rising imports partially offset those gains.
Sources: Federal Reserve, Bureau of Labor Statistics, and Bureau of Economic Analysis
Summary
The third quarter demonstrated that markets can continue moving higher even when the economic and geopolitical environment remains complicated. Corporate earnings, AI-related capital investment, consumer spending, and broader business investment provided support. At the same time, rising energy prices, higher Treasury yields, renewed inflation concerns, and slower September job growth created meaningful counterweights.
The quarter also reinforced several longstanding investment principles:
Positive index returns can conceal substantial differences among companies, sectors, and asset classes.
Higher bond yields can produce short-term price declines while improving future income opportunities.
Geopolitical events can affect energy prices and investor sentiment, but their timing and ultimate market impact are difficult to forecast.
Diversification remains important when a small group of companies or a single investment theme has an outsized influence on index performance.
Portfolio decisions should be based on long-term goals, time horizon, liquidity needs, and risk tolerance rather than attempts to predict the next economic release or policy decision.
Our core message remains unchanged: maintaining a diversified portfolio with discipline and periodic rebalancing provides a framework for participating in long-term growth while managing the risks that inevitably arise along the way. As always, your CWM advisor is available to discuss how these developments may relate to your financial plan and investment strategy.
Important Disclosure Information:
Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, including the investments and/or investment strategies recommended or undertaken by Columbus Wealth Management (“CWM”), or any non-investment-related content made reference to directly or indirectly in this commentary, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer reflect current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CWM. CWM is neither a law firm nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of our current written disclosure Brochure discussing our advisory services and fees remainsavailable upon request or at www.cbuswm.com. Please remember: If you are a CWM client, please contact CWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, or revising our previous recommendations and/or services, or if you would like to impose, add, or modify any reasonable restrictions to our advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please also remember to advise us if you have not been receiving account statements, at least quarterly, from the account custodian.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational and comparison purposes only and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, or the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your CWM account holdings correspond directly to any comparative indices or categories. Please also note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your CWM accounts; and (3) a description of each comparative benchmark/index is available upon request.
