Weekly Market Update for September 18, 2026
by Gavyn Jensen-Schneider, Research Associate
Market indices waffled throughout the week. The S&P 500 finished the week down -0.08%, while the Nasdaq rose +0.72%. The 10-Year Treasury yield, an interest rate indicator, closed at 5.00%, up +3 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, closed at 4.27%, up +12 bps from last week.
The Federal Open Market Committee (FOMC) hiked interest rate policy by 25 basis points at its meeting Wednesday, bringing the rate to 3.75% – 4.00%. The unanimous decision was described as “removing a dose of accommodation” by Chairman Warsh as the FOMC was “hard pressed” to call interest rate policy restrictive. The Chairman, who has already gained a reputation for being tight-lipped, gave little new information to market watchers, only describing the labor market as stable and highlighting elevated 6- and 12-month inflation trends.
The FOMC also released its quarterly summary of economic projections (SEP), in which committee members estimate the future path of the economy and interest rates. Inflation was clearly the worry of the committee, as the median member foresaw core PCE inflation at 3.7% by the end of 2026, before steadily lowering in 2027 and 2028 to reach the Fed’s 2% target. To beat back projected inflation, 16 of 18 FOMC participants forecast another interest rate hike before the end of the year. Consistent with his dislike of forward guidance, Chairman Warsh did not provide his own interest rate “dot” estimate in the SEP.
AI safety has been gaining attention in recent weeks, reaching a fever pitch as Anthropic CEO Dario Amodei called for global coordination and an international slowdown in AI development. Amodei sees AI as an amazingly powerful tool, but believes more third-party safety evaluators, regulation and cybersecurity protocols need to be developed to keep AI aligned with its users’ goals. Other AI leaders, including Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman pushed back, calling for tech leadership to self-regulate rather than bringing in government regulators. OpenAI and Anthropic have both committed to allowing independent evaluators access to company systems and models prior to their public releases.
International regulation on AI is one of many potential topics for President Donald Trump and President Xi Jinping next week as the Chinese leader visits Washington DC. Xi’s White House visit on September 24th will be the first in a decade, and the second summit of the two leaders this year. Outside of AI, the two dignitaries have much else to discuss; extending the tariff truce that began in October 2025 and expires on November 10th; locking in a deal for US agricultural and industrial goods; discussing the island of Taiwan; stemming fentanyl flows from China; and the Iranian conflict.
Trump and Xi’s Thursday meeting dwarfs the other events on next week’s calendar. A few investor day events are scheduled, including the Meta Connect event, while economic data primarily includes manufacturing and services PMI and September’s final reading of University of Michigan Consumer Sentiment.
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