Macrolyzed

This week

written Oct 9, 2026 · updated weekly

High safe yields favor cash, TIPS and after-tax munis; expensive, narrow US stocks, long bonds and rate-sensitive assets stand to lose if rates keep rising.

4 things to know
Safe yields now beat what stocks are priced to return, and after tax, munis edge Treasuries in top brackets.
  • Stocks' real extra return over TIPS is -0.47%: the 2.46% ten-year earnings yield is below the guaranteed 2.9% 10-year real yield (TIPS).
  • Tax-free muni yield (national) of 3.40% matches about 5.4% taxable in the top federal bracket, edging the 5.3% 10-year Treasury; state funds add more.
  • Caveat locking long yields risks price losses if rates rise further; a 30-year bond loses roughly 15% of its price per point of yield rise.
The Fed raised rates into a stalling job market, with an oil shock keeping inflation above its target.
  • Fed's policy rate rose to 3.8% in September, the first hike since 2023, with inflation (PCE, yearly) at 3.7% against a 2% target.
  • Total jobs (nonfarm payrolls) added just 29,000 in September; the quits rate at 1.9% says bargaining power sits with employers.
  • Oil (WTI) at $92 is up 60.2% year-to-date on a supply shock; gasoline at $4.35 a gallon is up 54.9% year-to-date.
Rising long yields are repricing everything rate-sensitive at once: bonds, small stocks, property and mortgages.
  • The 10-year Treasury yield at 5.3%, up 47 basis points (hundredths of a percent) in a month, is its highest since 2002.
  • One month: broad bond fund -2.1%, US small companies -3.6%, real estate funds (REITs) -5.4%, 30-year mortgage rate up 57 basis points to 7.3%.
  • Cash (3-month Treasury yield) pays 4.2% against 3.7% inflation: a real return while waiting, rare over the last twenty years.
Index gains sit in a few large tech companies while most stocks fall, and the calm fear gauge hides it.
  • Tech-heavy stocks (Nasdaq-100) rose 5.9% in a month while US small companies fell 3.6%, mid-size 2.1% and developed-world ex-US 3.3%.
  • An S&P 500 index fund is increasingly a bet on that handful of companies, not the broad economy.
  • Market fear gauge (VIX) at 15.7 is calm, below its 10-year average of 18.7, despite the correction beneath the surface.

Stocks

Chart
A few AI-linked giants carry the indexes while most stocks fall, and valuations leave no cushion over safe bonds.
  • S&P 500 up 2.2% and Nasdaq-100 up 5.9% in a month on AI-related stocks; 83% of S&P members trade over 10% below their 52-week highs.
  • Shiller CAPE (10-year P/E) at 40.6 versus a long-run average near 17; readings above 30 have preceded a decade of below-average returns.
  • Earnings yield on 10-year profits at 2.46% sits below the 2.9% 10-year real yield (TIPS): stocks are priced to return less than safe bonds.
  • Market fear gauge (VIX) at 15.7 is calm; insurance against a swing is cheap by the market's own pricing.
September 2026 Review and Outlook · Stock market news for Oct. 1, 2026 · Stock market news for Sept. 21, 2026
US stock market (S&P 500) 10/8/26 7,765 +15.3% 1Y Tech-heavy stocks (Nasdaq-100) 10/8/26 30,726 +22.4% 1Y Market fear gauge (VIX) 10/9/26 15.2 -29.7% 1Y US mid-size companies 10/8/26 $73.0 +13.6% 1Y US small companies 10/8/26 $137.3 +17.9% 1Y Developed-world stocks (ex-US) 10/8/26 $69.9 +18.9% 1Y Emerging-market stocks 10/8/26 $59.1 +10.9% 1Y Shiller CAPE (10-year P/E) September 2026 40.6 +5.2% 1Y Earnings yield on 10-year profits (CAPE) September 2026 2.46% -13 bps 1Y Stocks' real extra return over TIPS September 2026 -0.47% -126 bps 1Y Private equity (listed funds) 10/8/26 $55.90 -14.1% 1Y Corporate profits growth Q2-2026 26.6% +2,745 bps 1Y Corporate profit margins Q2-2026 13.1% +211 bps 1Y