Last week, longer-term bond prices declined pushing yields to multi-decade highs, driven in part by persistent inflation concerns and resilient US economic data. Yields on 30-year US Treasuries rose to 5.63%, the highest since 2002. In Europe, the UK 30-year Gilt yield hit 6% for the first time since 1998, while France’s political uncertainty and fiscal strains widened euro-area risk premiums. Lastly, a record-breaking US$52 billion debt package came to market from a major global mass media and entertainment company. 

In the US, economic data reinforced a higher-for-longer monetary policy stance. The US Conference Board’s consumer confidence index dropped to a 12-year low, weighed down by elevated energy prices, stagnating wages, and geopolitical risks surrounding ongoing Middle East tensions. Upward revisions to Q2 US gross domestic product (GDP) data, a measure of economic activity, and robust August consumer spending—which grew at its fastest pace in over a year—highlighted underlying economic resilience and reduced the urgency for near-term Federal Reserve rate hikes. In response to the combined data, swap markets reduced the implied probability of a 25-basis point October rate hike from 54% the week prior to 21%. 

In corporate news, Paramount Skydance dominated headlines by pricing a massive US$52 billion debt package to fund its acquisition of Warner Bros. Discovery—one of the largest M&A financing deals of 2026. According to Bloomberg, the bond offering featured a US$30 billion investment-grade bond sale across eight tranches, spanning two- to 40-year maturities, rated BBB- by Fitch. The longest-dated 40-year investment grade bond was priced to yield roughly 9.033%, approximately 325 basis points above risk-free treasuries. Investment grade coupons ranged from 6.3% to 8.75%. The debt package also included a US$12.4 billion high-yield offering rated BB by Fitch and term loan facilities totaling US$8.5 billion and €840 million. According to Bloomberg, the roughly three-month lawsuit-driven delay forced Paramount to borrow in the current higher yield environment, costing the company hundreds of millions in incremental interest over the debt’s life. 

In September 2026, the S&P 500 index decreased 0.45%, as a surge in long-term yields created a headwind for rate-sensitive sectors, such as consumer discretionary and real estate, and commodity-linked sectors such as materials faced rising input cost pressures from the Middle East war. This was slightly offset by stronger technology sector performance—as AMD hit a US$1 trillion market capitalization, joining other chipmakers like Nvidia, Broadcom, and Micron in the exclusive US$1 trillion club. Despite the index’s negative overall performance, fund flows across ETFs passively tracking the S&P 500 were notably mixed.

The State Street SPDR ETF (SPY) led monthly inflows, while the Vanguard S&P 500 ETF (VOO) experienced top outflows. This divergence likely reflected tactical reallocations by institutional investors, with SPY outflows further influenced by speculative trading given its highly active options market. Outside the S&P 500, the Invesco QQQ Trust ETF recorded net outflows. This likely reflected the Nasdaq 100's higher concentration in tech and growth stocks, which are particularly sensitive to rising interest rates. By the end of September, the 10-year US Treasury yield reached 5.29%—its highest level since 2007—increasing borrowing costs and compressing the value of future earnings growth for long-duration equities.

In fixed income, September brought a bond selloff that pushed long-term yields to multi-decade highs, while the Federal Reserve raised rates for the first time in over three years. In response, the shorter-duration iShares 0-3 Month Treasury Bond ETF (SGOV) saw strong inflows, reflecting heightened demand for cash-management tools. Meanwhile, the iShares Core Universal Bond ETF (IUSB) attracted capital as investors sought broad fixed income diversification exposure across treasuries, agencies, investment-grade corporates, and a small slice of high yield debt.