This Week in Review | Fed Rate Hike, Tech Volatility & AI Risks, Bond Yields (Sept. 18, 2026)
This Week in Review covers three major market developments: the Federal Reserve's first rate hike since 2023 (25 basis points to 3.75-4%), tech sector volatility driven by AI safety concerns, and rising bond yields globally reaching levels unseen in decades. The hosts emphasize that these moves were largely expected, offer historical context for current yields, and remind investors to focus on broader fundamentals rather than short-term market swings.
Summary
The episode opens with analysis of the Federal Reserve's Wednesday decision to unanimously raise the Fed funds rate by 25 basis points, bringing the target range to 3.75-4%. This marks the first rate hike since 2023, though it was largely anticipated by markets—evidenced by modest market reactions (S&P 500 down less than 0.5%, two-year Treasury yield up slightly). The Fed signaled another possible hike later in the year. The hosts contextualize this by noting that stocks can rise during rate hike cycles, as demonstrated by the current bull market that began in October 2022 during a previous hiking cycle. They argue the rate hike represents a minor headwind but shouldn't derail the bull market, citing supportive factors: steep yield curves encouraging bank lending, strong worldwide corporate earnings through Q2, and pockets of investor skepticism suggesting room for further gains.
The second segment addresses technology sector volatility triggered by high-profile tech leaders' calls to slow AI development due to safety concerns. Semiconductor stocks were especially volatile, with concerns about reduced data center spending and chip demand. However, the hosts caution against overreacting to single-week headlines, emphasizing that earnings growth remains strong across multiple sectors (energy, communication, materials, and consumer discretionary all expected to post double-digit earnings growth). They highlight how high expectations for tech stocks create less opportunity for positive surprises and increase downside risk, while the sector's cooling sentiment could paradoxically create more room for broader market gains by resetting expectations and slowing the march toward euphoria.
The final segment examines rising bond yields, with the US 10-year Treasury briefly exceeding 5% (first time since 2007), Germany's 10-year above 3.5% (highest since 2009), and Japan's 10-year above 3% (30-year high). The hosts provide crucial context by noting these yields appear high only because investors have grown accustomed to the exceptionally low rates following 2008, sustained through zero interest rate policies and quantitative easing until 2022. Historically, today's yields were common in the 1980s and 1990s without triggering crises or preventing strong stock returns. The hosts emphasize that yield levels alone tell incomplete stories—what matters more is the spread between short- and long-term rates. They note that US and developed market spreads are currently positive and have widened in 2026, which supports economic growth by encouraging bank lending on favorable terms.
About this episode
The economy and markets can feel dizzying and ever changing. That’s where we can help. Fisher Investments’ “This Week in Review” is a weekly segment designed to highlight a few things you may have missed this week, what they could mean for financial markets and why they matter to investors like you. This week, Fisher Investments reviews: • The Fed’s interest rate decision • Tech volatility amid AI pause talks • Climbing bond yields Chapters: 0:31 Fed Rate Hike 2:51 Tech Volatility & AI Risks 5:09 Bond Yields 7:43 Closing Remarks Want to dig deeper? • More on the Fed’s first rate hike since 2023: https://www.fisherinvestments.com/en-us/insights/market-commentary/the-ineffectual-fed-hike See where Fisher Investments spots opportunity and position your portfolio for the road ahead: https://www.fisherinvestments.com/en-us/campaigns/smo/lf?PC=OSCALFNO28&CC=XXXX. Have feedback for this Fisher Investments video? Share your thoughts on this episode in just 1 minute by filling out this survey: https://fi.co1.qualtrics.com/jfe/form/SV_6Vw1ezlogR044S2?VideoCode=WeekInReview18Sept2026 Connect with Fisher Investments on: • Facebook - https://www.facebook.com/FisherInvestments • X - https://twitter.com/fisherinvest • LinkedIn - https://www.linkedin.com/company/fisher-investments • Instagram - https://www.instagram.com/fisher.investments/ • TikTok - https://www.tiktok.com/@fisher_investments You can also follow Ken Fisher here: • Facebook - https://www.facebook.com/KenFisher.FisherInvestments • X - https://twitter.com/KennethLFisher • LinkedIn - https://www.linkedin.com/in/ken-fisher/ • Instagram - https://www.instagram.com/kenfisher_fisherinvestments/ Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.
Key Insights
- The Federal Reserve's rate hike was widely priced into markets beforehand, as evidenced by the S&P 500 falling less than half a percent on announcement day, indicating investors had largely anticipated the decision.
- High expectations for technology firms leave less opportunity for positive surprises and open the door to sharp drops at the first sign of bad news, whereas cooling tech sentiment can paradoxically create more room for broader market gains by resetting expectations.
- Today's bond yields appear alarming only because investors grew accustomed to unusually low rates from 2007 through the pandemic, but historical context shows similar yields in the 1980s and 1990s did not prevent strong stock market returns.
Topics
Transcript
[0:05] Hello and welcome to <i>This Week in Review</i>. This weekly segment is designed to highlight a few things you may have missed this week, what they could mean for financial markets and why they matter to investors like you. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let's review what happened this week. First, the Fed rate hike. On Wednesday, the Federal Reserve's policy setting committee voted [0:37] unanimously to raise the Fed funds policy rate by 25 basis points. That brings the Fed's target interest rate range to 3.75% to 4%, and it marks the first hike since 2023. This move was widely expected, so most of…
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