The first four weeks of the quarter were good for stock investors. The S&P 500 index rose 3.1% in July on good news about slowing inflation, but subsequently dropped 6.6% in August and September on less positive inflation indicators, concerns about a government shutdown and
debt, and striking unions.
Interest rates have been the dominant driver of market returns across asset classes. The chart below plots the S&P Index price level (in blue) against the yield for the 10 Year Treasury Bond (in red) during Q3. The inverse relationship between the two is crystal clear through this view. When interest rates rise, the S&P 500 index drops and vice versa.
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September Market Review from tru Investment Management (tIM)