Stock Market Commentary October 2026

As we approach the final quarter of 2026, several important economic and geopolitical factors are shaping the investment landscape. This month's commentary addresses opportunities and risks to consider, particularly around year-end planning strategies, market volatility, and potential shifts in interest rates and taxation.

Should You Consider an IRA to Roth IRA Conversion?

The US Government adds $2.6 million of interest to our national debt every minute because the total balance is now over $40 trillion (1). Because of this, tax brackets may need to be increased in the future. As year end approaches, now is a great time to discuss IRA to Roth IRA conversions.

If you pay taxes on some of your retirement savings now, it could be beneficial if tax brackets increase in the future. Our tax planning strategies can help you evaluate whether a conversion makes sense for your specific situation. Please give us a call if you'd like to discuss it.

Why Is the Market Choppy? Understanding Mixed Economic Data

In September at various points, the S&P 500 was around the same price as May of this year, showing the market is overall chopping sideways (2). ADP is a payroll processor and announced that Private Sector employers hired 90,000 workers in September, so the job market is seemingly strong (3).

The Personal Consumption Expenditures (PCE) Price Index is an important measure of inflation. For August, it showed inflation increased by 3.4%. This is above the Federal Reserve's target of 2%, which may lead to more interest rate increases before year end. The 30 year mortgage interest rate climbed for the 6th straight week up to 7.3%, which may keep people tethered to their existing home (4).

What's Driving Interest Rate Increases?

On September 16th, the Federal Reserve raised their benchmark interest rate by 0.25% to attempt to tame inflation. Officials project at least one more rate increase before year end (5).

We have reached the 7th month of the conflict in Iran. The spokesperson for Iran's Revolutionary Guard Corps said Tuesday the only way the conflict will end is if Washington admits defeat and U.S forces leave the region (6). In our opinion, unless the conflict in Iran ends soon and the Strait of Hormuz is fully reopened, oil prices will remain elevated which may contribute to stubborn inflation numbers, and further Fed rate hikes.

How Could Mid-Term Elections Affect Your Portfolio?

Past performance cannot predict future performance, but in our opinion, the next month may have increased volatility.

Generally speaking, the stock market does not like uncertainty. Who will have control of the House and Senate will be a big question mark this fall, and it may cause some uncertainty for investors.

What's the Outlook for the Rest of 2026?

We believe what remains of calendar year 2026 has the potential to have positive stock market performance, but it will likely have plenty of volatility. Anything is possible, so please continue to read our market commentaries, and know that we are doing everything we can to monitor and adjust when prudent.

Please check out our YouTube channel to get more frequent and more thorough updates from us: www.youtube.com/@SummitfinancialconsultingLLC

Schedule Your Portfolio Review

If it has been a while since your last review, or you’ve had changes to your family, finances, employment, financial goals, or risk tolerance, you can contact our team to review how those changes may affect your financial plan.

Learn more about our investment planning and portfolio review process or schedule a review meeting with our team. You can also call us at (586) 226-2100.

Sincerely,

Kenneth R. Wink with contributions from Bob Wink, Jim Wink, Zachary A. Bachner, CFP®, James Baldwin, and Daniel Ladzinski, M.S., CFP®, CRPC®, AWMA®, MPAS™