As we move into the last three months of 2026, the third quarter is in the books and as usual proved another eventful one for investors. The S&P 500 finished the quarter near all-time highs with a total return of 2.3%, bringing its year-to-date gain to 12.7% (as of 9/30/26). However, as has been the case all year, the headline numbers only tell part of the story.
Given the events of the quarter, one might have expected a much worse result. Oil prices surged roughly 30% as the conflict in the Middle East continued, pushing gas prices to their highest levels in years. Inflation remained well above the Federal Reserve’s 2% target, and in September the Fed raised interest rates for the first time in more than three years, to a range of 3.75%-4.00%. Keep in mind that coming into the year, most estimates called for rate cuts. The 10-Year Treasury yield rose more than 0.80% in the quarter, one of the largest quarterly increases in years. While there was clearly plenty of unsettling news, some areas of markets managed gains anyway, supported by a solid U.S. economy and very strong corporate earnings.
A closer look does show weakness in some areas of the market. After a first half in which market returns broadened beyond large cap technology stocks, leadership narrowed sharply back in that direction. The NASDAQ gained roughly 2.6%, while the Russell 2000 Small Cap index fell 7.2%. International developed and emerging market stocks finished with slight gains and slight losses, respectively. With the technology sector close to 40% of the S&P 500, these stocks did much of the heavy lifting for the index.
Coming into the year we positioned client portfolios for a broadening of the market, with healthy allocations to value, small-cap and international stocks. In the first half, that positioning was rewarded, while this quarter it was a headwind. These shifts can happen quickly in either direction in the short-term, which is why it’s important to have broad exposure and not try to time short-term moves. Even after a difficult quarter, small-cap and emerging market stock performance remains ahead of the S&P 500 year-to-date, while international developed performance remains solid.
It was a difficult quarter for fixed income as rising interest rates pushed most bond categories lower, with investment-grade bonds down roughly 3-4%. Bond prices decline when interest rates rise. Our allocation to short and intermediate-term bonds helped here, as longer-term bonds bore the brunt of the rate increases. The silver lining is that with the 10-Year Treasury yield now above 5%, yields are the most attractive they’ve been in years. That higher income should help support bond returns going forward and allow bonds to steady portfolios if there is a pullback in stocks.
We also rebalanced client accounts in August where appropriate. The main goal was to bring accounts back to target allocations and in many cases to the more conservative end given the strong stock performance over the past several years. We also made allocation changes that included the following:
• Stocks: A slight increase in large cap value and U.S. stocks, given the strong performance of small cap, international developed and emerging market stocks over the past year.
• Bonds: An increase in intermediate bonds given more attractive starting yields, and adding inflation protection, floating rate and international bonds where appropriate.
Looking forward, we remain committed to a diversified approach. With election season in full swing, you’ll likely hear plenty of confident predictions about what the results will mean for markets. The truth is that no one knows for sure, and markets have historically done well under a wide range of political outcomes. That’s why we believe in having a long-term plan that isn’t dependent on headlines, election results or the next Fed meeting, but is instead based on your time horizon, risk tolerance and long-term goals.
Please contact us if Parable Wealth Advisors can help you and your family with your investment management and financial planning goals.
Important Disclosures
Parable, LLC d/b/a Parable Wealth Advisors (“Parable”) is an investment adviser registered with the U.S. Securities and Exchange Commission] Registration does not imply a certain level of skill or training.
This commentary is provided for informational purposes only and reflects Parable’s opinions as of October 30, 2026, based on market data as of September 30, 2026. Opinions are subject to change without notice. It is not a recommendation, offer, or solicitation to buy or sell any security or to adopt any investment strategy, and it is not investment, tax, or legal advice. It does not consider the objectives, financial situation, or needs of any individual. Consult your financial professional before making any investment decision. Statements regarding Parable’s expectations, outlook, or positioning, and regarding future market, economic, inflation, interest rate, earnings, or geopolitical conditions, are forward-looking. They are based on assumptions that may not materialize and are not guarantees. Actual results may differ materially. References to Parable’s positioning describe general allocation themes and are not representative of any particular client account. Client portfolios are managed according to each client’s objectives, risk tolerance, and restrictions; not all clients held the asset classes discussed or held them in the same proportions. This commentary does not present the performance of any Parable client account, model, or composite, and the returns of the asset classes and indices discussed should not be interpreted as returns achieved by Parable clients. Third-party data are believed to be reliable but have not been independently verified, and Parable makes no representation as to their accuracy or completeness. Investing involves risk, including possible loss of principal. Past performance is not indicative of future results. Additional information about Parable, including its services and fees, is available in its Form ADV Part 2A and Form CRS at adviserinfo.sec.gov (CRD No. 304873) or upon request at (904) 420-0008. See our Disclosure page for additional important information.
As we move into the last three months of 2026, the third quarter is in the books and as usual proved another eventful one for investors. The S&P 500 finished the quarter near all-time highs with a total return of 2.3%, bringing its year-to-date gain to 12.7% (as of 9/30/26). However, as has been the case all year, the headline numbers only tell part of the story.
Given the events of the quarter, one might have expected a much worse result. Oil prices surged roughly 30% as the conflict in the Middle East continued, pushing gas prices to their highest levels in years. Inflation remained well above the Federal Reserve’s 2% target, and in September the Fed raised interest rates for the first time in more than three years, to a range of 3.75%-4.00%. Keep in mind that coming into the year, most estimates called for rate cuts. The 10-Year Treasury yield rose more than 0.80% in the quarter, one of the largest quarterly increases in years. While there was clearly plenty of unsettling news, some areas of markets managed gains anyway, supported by a solid U.S. economy and very strong corporate earnings.
A closer look does show weakness in some areas of the market. After a first half in which market returns broadened beyond large cap technology stocks, leadership narrowed sharply back in that direction. The NASDAQ gained roughly 2.6%, while the Russell 2000 Small Cap index fell 7.2%. International developed and emerging market stocks finished with slight gains and slight losses, respectively. With the technology sector close to 40% of the S&P 500, these stocks did much of the heavy lifting for the index.
Coming into the year we positioned client portfolios for a broadening of the market, with healthy allocations to value, small-cap and international stocks. In the first half, that positioning was rewarded, while this quarter it was a headwind. These shifts can happen quickly in either direction in the short-term, which is why it’s important to have broad exposure and not try to time short-term moves. Even after a difficult quarter, small-cap and emerging market stock performance remains ahead of the S&P 500 year-to-date, while international developed performance remains solid.
It was a difficult quarter for fixed income as rising interest rates pushed most bond categories lower, with investment-grade bonds down roughly 3-4%. Bond prices decline when interest rates rise. Our allocation to short and intermediate-term bonds helped here, as longer-term bonds bore the brunt of the rate increases. The silver lining is that with the 10-Year Treasury yield now above 5%, yields are the most attractive they’ve been in years. That higher income should help support bond returns going forward and allow bonds to steady portfolios if there is a pullback in stocks.
We also rebalanced client accounts in August where appropriate. The main goal was to bring accounts back to target allocations and in many cases to the more conservative end given the strong stock performance over the past several years. We also made allocation changes that included the following:
• Stocks: A slight increase in large cap value and U.S. stocks, given the strong performance of small cap, international developed and emerging market stocks over the past year.
• Bonds: An increase in intermediate bonds given more attractive starting yields, and adding inflation protection, floating rate and international bonds where appropriate.
Looking forward, we remain committed to a diversified approach. With election season in full swing, you’ll likely hear plenty of confident predictions about what the results will mean for markets. The truth is that no one knows for sure, and markets have historically done well under a wide range of political outcomes. That’s why we believe in having a long-term plan that isn’t dependent on headlines, election results or the next Fed meeting, but is instead based on your time horizon, risk tolerance and long-term goals.
Please contact us if Parable Wealth Advisors can help you and your family with your investment management and financial planning goals.
Important Disclosures
Parable, LLC d/b/a Parable Wealth Advisors (“Parable”) is an investment adviser registered with the U.S. Securities and Exchange Commission] Registration does not imply a certain level of skill or training.
This commentary is provided for informational purposes only and reflects Parable’s opinions as of October 30, 2026, based on market data as of September 30, 2026. Opinions are subject to change without notice. It is not a recommendation, offer, or solicitation to buy or sell any security or to adopt any investment strategy, and it is not investment, tax, or legal advice. It does not consider the objectives, financial situation, or needs of any individual. Consult your financial professional before making any investment decision. Statements regarding Parable’s expectations, outlook, or positioning, and regarding future market, economic, inflation, interest rate, earnings, or geopolitical conditions, are forward-looking. They are based on assumptions that may not materialize and are not guarantees. Actual results may differ materially. References to Parable’s positioning describe general allocation themes and are not representative of any particular client account. Client portfolios are managed according to each client’s objectives, risk tolerance, and restrictions; not all clients held the asset classes discussed or held them in the same proportions. This commentary does not present the performance of any Parable client account, model, or composite, and the returns of the asset classes and indices discussed should not be interpreted as returns achieved by Parable clients. Third-party data are believed to be reliable but have not been independently verified, and Parable makes no representation as to their accuracy or completeness. Investing involves risk, including possible loss of principal. Past performance is not indicative of future results. Additional information about Parable, including its services and fees, is available in its Form ADV Part 2A and Form CRS at adviserinfo.sec.gov (CRD No. 304873) or upon request at (904) 420-0008. See our Disclosure page for additional important information.
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