The war with Iran upended markets this month. There were losers — and winners

Markets Absorbed a Violent September With an Uneven Show of Resilience

Healfromzero.com – September delivered a sharp reminder that financial markets do not always move in unison. The war with Iran intensified pressure on energy costs, inflation concerns and interest-rate expectations, sending bond yields to their highest levels in years. Brent crude climbed above $100 a barrel, while central banks in several parts of the world raised borrowing costs.

Despite those strains, the broad US stock market was remarkably steady. The S&P 500 finished the month down only 0.45%, a modest decline considering the turbulence elsewhere. Its calm finish, however, concealed substantial differences between sectors and raised questions about whether equities can continue to withstand higher yields and expensive oil.

The close of September also ended the third quarter, revealing a market in which a small group of major technology and energy companies carried much of the positive momentum while bonds, travel stocks and precious metals faced substantial losses.

Bonds Face Their Toughest Conditions

Bond investors endured one of the month’s clearest setbacks. Prices fell as yields rose, reflecting worries that the energy shock could sustain inflation and require tighter monetary policy for longer. When bond prices decline, their yields move in the opposite direction, meaning existing holders can take losses even as new investors see more attractive income opportunities.

The pressure was broad. A Vanguard exchange-traded fund that follows the overall US bond market was down 5% for the year. Municipal debt also struggled, with the iShares National Muni Bond ETF lower by roughly 6% so far this year.

Bond-market anxiety rose quickly. A closely watched measure of expected bond volatility jumped about 47% in September, its largest monthly increase since February 2021. That surge pointed to concern that rapid movements in rates could create wider market disruptions.

There is a potential upside for buyers entering the market now. Bond funds have become less expensive than they were a few months ago, and yields at multi-year highs can provide stronger income than was available during the long period of very low rates. Still, the immediate outlook remains tied to inflation trends and the path of central-bank policy.

Travel Companies Feel the Cost of Fuel and Financing

Rising fuel prices and higher interest rates hurt industries that are especially exposed to operating costs and consumer spending. Cruise operators were among the most affected companies during the quarter.

Norwegian Cruise Line Holdings shares fell 31% in the quarter and are down 34% for the year. It was the company’s weakest quarterly showing since the second quarter of 2022, when Russia’s invasion of Ukraine began. Royal Caribbean declined 16% during the quarter, leaving its shares down nearly 5% this year. Carnival Corporation dropped 14% over the quarter and is down 20% in 2026.

Carnival offered a more mixed picture. The company beat Wall Street estimates in earnings released Tuesday, as solid consumer demand helped counter the effect of more expensive fuel. Its outlook remained supported by demand that analysts described as resilient, though fuel costs remain an important risk for the sector.

Airlines also felt the impact of costlier energy, particularly through higher jet-fuel expenses. American Airlines shares fell 26% in the third quarter and were down 13% for the year.

Higher Rates Weigh on Precious Metals

Precious metals also lost ground as yields and policy rates moved higher. Gold futures declined by more than 6% during September, silver lost 9%, and palladium fell 12%.

Metals do not generate interest payments, dividends or other income. That characteristic can make them relatively less attractive when bonds and cash-like investments offer higher returns. The month’s moves illustrated how rising rates can affect assets often viewed as defensive holdings.

Technology Helps Keep the Index Near Flat

The restrained decline in the S&P 500 was driven in large part by gains among the largest technology companies. Meta rose 29% in the third quarter, its strongest quarterly performance in two years. Microsoft gained 38%, marking its best quarter since 1998.

Those advances mattered because the S&P 500 is weighted by market capitalization. Companies with the greatest market values exert the most influence on the index, so strong performance from a small number of large technology stocks can offset weakness across many other industries.

Technology climbed 5% in September even as most S&P 500 sectors ended the month lower. The result was an index that slipped just 0.45% for the month and gained 2% for the quarter.

An equal-weight version of the S&P 500 told a different story. Because it assigns the same influence to every company, it fell 1.55% over the quarter. The contrast underscored how dependent headline index performance had become on a relatively narrow group of technology leaders.

Energy Producers Gain From the Oil Rally

Energy companies emerged as major beneficiaries of the rise in crude prices. Higher oil prices can improve revenue and profits for producers and refiners while also encouraging additional production.

Phillips 66 surged 51% during the quarter and was up 98% for the year. Chevron rose 23% in the quarter, ConocoPhillips added 20%, and ExxonMobil gained 19%.

Energy and technology stood as the two strongest S&P 500 sectors for the year. Their gains helped soften the effect of losses in bonds, travel businesses, metals and many other equity groups.

The market’s split performance leaves investors with a difficult balance to assess. Higher yields can eventually improve income opportunities for bond buyers, while elevated oil prices support energy companies. At the same time, expensive fuel can burden consumers and transportation businesses, and persistent inflation may keep interest rates restrictive. September showed that stocks can remain steady in the face of those forces, but it also showed that the apparent stability of an index can mask considerable stress underneath.