The rally continues.

A lot of factors influence the United States stock market, including economic trends, market sentiment, and government and Federal Reserve (Fed) policies. However, many investors consider earnings, which reveal how profitable a company is after paying expenses, one of the most important indicators of company and market health.

Companies have been more profitable than analysts expected.

In 2026, most companies in the Standard & Poor’s (S&P) 500 Index have delivered higher-than-expected profits. John Butters of FactSet reported:

• From January through March 2026, overall S&P 500 earnings grew 28.6 percent year over year, and 85 percent of companies in the Index reported higher-than-expected earnings.
• From April through June 2026, overall earnings grew 50.4 percent year over year. Much of that resulted from unusually large earnings at two of the largest companies in the Index. When they’re excluded, growth was still 32 percent year over year.

Analysts expect profits to keep growing in 2026.

The pace of hiring and wage growth has slowed.

The availability of jobs and the size of paychecks shape how Americans feel and how they spend. That’s important because consumer spending is a primary driver of economic growth in the United States.

• The number of new jobs needed to maintain full employment is uncertain because it depends on immigration numbers. Last year, Alexander Bick of the Federal Reserve Bank of St. Louis explained that immigration “is a significant source of labor for the U.S. economy.” He estimated that much lower immigration projections had cut the optimal number of jobs from more than 150,000 a month to a range of 32,000 to 82,000. His newest estimate is 15,000 to 87,000.

Last week, the Bureau of Labor Statistics (BLS) reported that unemployment remains low by historical standards, even though job growth remains modest. Employers cut 23,000 jobs in July and just 34,000 jobs a month were added, on average, over the last year. That pace falls within Bick's breakeven range, which helps explain why unemployment has stayed low even as hiring slowed.

• The report also showed average hourly pay rose 3.2 percent over the year through July 2026. Inflation eased some over that period, slowing to 3.5 percent in June from 4.2 percent a month earlier. Even so, wages have not kept pace with prices.

For now, strong earnings are carrying the market, hiring is slowing without stalling, and inflation is cooling even if paychecks have yet to catch up.

Last week, major U.S. stock indexes gained. Yields on longer maturities of U.S. Treasuries moved lower after the weaker-then-expected employment report raised “fresh concerns about the labor market while dimming the immediate outlook for higher Fed interest rates,” reported Yun Lee, Sean Conlon, and High Leasak of CNBC.

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

WHAT DO YOU KNOW ABOUT BACK-TO-SCHOOL TIME? The shock of an early alarm after sleeping in all summer, the smell of old textbooks, and that fluttery mix of dread and excitement about who you'd sit next to in homeroom. Whether your first day of the new school year involved a chalkboard, an overhead projector, or a smartboard, one thing united many of us: the sensory overload of a crowded school hallway as everyone caught up after a few weeks off. With the school buses rolling out again, it is the perfect time for a pop quiz. This quiz won't be graded, there's no permanent record, and you absolutely do not need a calculator.

1. According to the Merriam Webster Dictionary, the English word "school" traces back to the ancient Greek word "scholē." Somewhat ironically, what did that original Greek word mean?
   1. A place of gathering
   2. Leisure time
   3. Strict discipline
   4. The pursuit of wisdom
2. According to a 2025 AdoptAClassroom.org survey, about how much of their own money did the average U.S. teacher spend on classroom supplies during the 2024–25 school year?
   1. About $300
   2. About $550
   3. About $895
   4. About $1,500
3. Recognized by the Guinness Book of World Records as the “oldest existing and continually operating educational institution in the world”, the University of Karueein was established in 859 AD. Where is the university located?
   1. Bologna, Italy
   2. Oxford, England
   3. Fez, Morocco
   4. Athens, Greece
4. In 1939, school transportation officials met to establish “national construction standards for the American school bus,” reported Bryan Greene of Smithsonian Magazine. Today, most U.S. school buses are painted the same color, which is officially known as "National School Bus Glossy Yellow." What was the main reason this particular shade was chosen?
   1. It contrasts sharply with red stop signs and traffic signals
   2. It's an easy color for the human eye to see
   3. It resists fading and hides road dirt better than darker colors
   4. It matched the color already used on U.S. postal and government vehicles

Whether you aced every question or found a few to be challenging, we hope this quiz brought a smile to your day. Any time you have questions about financial matters, please get in touch.

WEEKLY FOCUS – THINK ABOUT IT

“An investment in knowledge pays the best interest.”

― Benjamin Franklin, Founding Father, scientist, and inventor

Answers: 1) b; 2) c; 3) c; 4) b