Inflation is creeping higher, gas prices are up, the 10-year Treasury yield jumped to 5%, and midterms are around the corner.

It's no wonder "What's going on in the markets?" is the question I hear more than any other.

This month's seven charts offer some useful perspective, including a few encouraging developments that haven't received nearly as much attention.

In today's email:

• How stocks became less expensive during a double-digit market rally
• The historical perspective missing from today's interest-rate debate
• How Millennials and Gen Z actually stack up against previous generations... and more!

As always, I'll wrap up with a few of the best retirement and investing articles I read in the past week.

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Before we dive in, did you catch this week's podcast? 👇

Favorite Charts (October 2026)

1.) Inflation Ticked Higher in September

September’s inflation reading (CPI) came in at 3.7%, which was a little higher than expected. Core inflation, which leaves out food and energy prices, looks more reasonable at about 2.6%.

The Fed's preferred gauge is actually the Personal Consumption Expenditures (PCE) index, which casts a wider net, including things like healthcare paid for by employers and Medicare.

Still, even core CPI is running above the Fed’s 2% target, so there’s clearly more work to do.

Remember, the inflation rate in the news is rarely your personal inflation rate.

👉 Learn more: The 3 Questions That Reveal Your Real Inflation Risk in Retirement​

2.)Energy, Not Groceries, Is Driving Prices

Core inflation is sometimes jokingly called "inflation ex-inflation." After all, every household buys food and energy, so excluding them can seem a little silly.

But those are the costs most prone to short-term spikes, and this year is a perfect example.

Break inflation down by category, and it's clear the jump in oil and gasoline prices has been the primary driver of this year's higher readings.

Meanwhile, most food categories have risen at rates below headline inflation, and several are even below the core figure.

In other words, the key to reining in inflation may simply be an end to the conflict in the Middle East, which would be welcome news for reasons far beyond your gas bill.

3.) Interest Rates Are Surprisingly Average

Pundits talk non-stop about how high interest rates are, but the reality is a bit surprising.

At the end of September, the 10-year Treasury yield was 5.3%, right around its 5.1% average since 1940.

So which era was actually the anomaly?

The ultra-low rates of the 2010s, 1940s, and early '50s? Or the elevated rates from the late '60s through the 1990s?

For long-term investors, it may not matter much.

From 1940 through September 2026, the S&P 500 delivered a total return of about 11% per year, through every rate environment and every bump along the way.

That's a good reminder to stay focused on your plan rather than the rate forecast of the week. 😊

4.) The Most Overlooked Story of the Year

One of the biggest market stories this year has been the surprising shift in stock valuations.

Despite double-digit gains in stock prices, valuations have declined significantly.

How is that possible?

Generally, there are two ways for the price-to-earnings (P/E) ratio to fall:

• Stock prices decline, or
• Earnings grow faster than stock prices.

This year, we've experienced the latter. Stock prices have risen at an above-average pace, but corporate earnings expectations have increased even faster.

As a result, investors are paying less for each dollar of expected earnings than they were a year ago, even though stock prices are higher.

It's been a remarkable run for corporate earnings expectations and a reminder that rising stock prices don't necessarily mean stocks are becoming more expensive.

5.) Earnings Growth Is a Global Story

The U.S. stock market gets most of the attention, but the earnings outlook extends well beyond our borders.

Emerging-market earnings are projected to grow an extraordinary 75% this year, while most major markets are expecting double-digit growth.

Forecasts also point to continued earnings growth in 2027 and 2028.

Of course, forecasts aren't guarantees, but the outlook is encouraging and another reminder of the value of global diversification.

6.) Midterms Aren't the Worry They May Appear

With November's midterm elections approaching, it's natural to wonder how the results might affect the stock market, but history offers some reassuring perspective.

According to Carson Group, the S&P 500 has been higher one year after each of the past 19 midterm elections, with an average gain of nearly 15%.

Of course, there's no guarantee this election will follow the same pattern.

But if you're considering changes to your portfolio based on who wins in November, this historical perspective is worth keeping in mind.

7.) This Is What Progress Looks Like

For years, the prevailing narrative has been that younger generations are falling behind their parents and grandparents.

If you have kids or grandkids, you've probably worried about this yourself.

But Federal Reserve wealth data paint a more encouraging picture.

At comparable ages, each successive generation, including Millennials and Gen Z, has generally accumulated more wealth than its predecessors, even after adjusting for inflation.

That doesn't erase the very real challenges younger generations face, but it suggests the story is more encouraging than the headlines often imply.

Bottom Line

The future rarely unfolds quite so predictably.

Even when the headlines make one outcome seem inevitable, there are always forces at work that can change the picture, sometimes for the better.

For those in or approaching retirement, the better approach is to prepare for a range of outcomes:

Maintain sufficient reserves for near-term spending while keeping the rest of your portfolio positioned for long-term growth.

That balance can help you avoid making reactive decisions when conditions worsen, while allowing you to benefit when things turn out better than expected.

And as these charts remind us, there's plenty of reason to remain optimistic about the years ahead.

📚 What I've Been Reading

• Are the Careers of Older Workers Being Cut Short by AI? (Center for Retirement Research)
• Value Stocks Are Still Cheap (Larry Swedroe)
• The Case for Global Investing (Nonmaterial)
• Hospitality Is a Two Way Street (Seth Godin)
• How the Largest Animal Crossing Overpass in North America Is Making Everyone Safer (Smithsonian)

Thank you for reading!

Please reply to this email with comments, questions, and/or feedback.

Stay wealthy,

Taylor Schulte, CFP®