The economy has been resilient, bond yields are testing important levels, market leadership is broadening and emerging markets are having a strong year. Here are five questions I’ll be watching as we enter the final three months of 2026.

It’s hard to believe we’re already approaching the final three months of 2026.

If I had to use one word to describe the investment environment so far this year, it might be resilient.

The economy has remained stronger than many expected. Consumers keep spending. Corporate earnings have held up. Stocks have absorbed higher interest rates, geopolitical uncertainty, volatile oil prices and plenty of questions about the sustainability of the AI boom.

Even parts of the market that spent years living in the shadow of mega-cap growth stocks have started participating.

Of course, resilience doesn’t mean invincibility.

Markets moves are rarely linear, economic conditions change, and some of the trends that worked during the first nine months of the year could look very different by December.

Rather than trying to predict exactly where the S&P 500, Treasury yields or the economy will finish the year, I’m thinking about the fourth quarter through five questions.

Four are about markets.

One is considerably more important to me on Saturday afternoons.

1. Can the U.S. Economy Keep Defying the Skeptics?

For much of the past several years, investors have been waiting for higher interest rates to finally break something.

So far, the U.S. economy has been remarkably resilient.

Consumers continue to spend. August retail sales increased 1.2%, while the measure of core retail sales that more closely tracks consumer spending jumped 1.4%.  But underneath those headline numbers, things get more complicated.

Inflation remains stubborn. Consumer sentiment has weakened. Lower-income households are feeling more pressure from higher food, energy and other essential costs. And while the labor market has regained some footing following weakness earlier this summer, employment remains one of the most important indicators to watch.

That creates an interesting dynamic heading into the fourth quarter.

The consumer has been one of the primary engines keeping the economy moving. But consumers ultimately need income to keep spending. If employment weakens meaningfully while inflation remains elevated, that resilience could become much harder to maintain.

That’s why I don’t think we can look at consumer spending, inflation and employment independently.

They are increasingly interconnected.

Strong consumer spending can support economic growth, but it can also contribute to inflation pressure. Persistent inflation can keep monetary policy tighter. Higher borrowing costs can eventually weigh on consumers and businesses. A weakening labor market can then pressure spending.

The question isn’t simply whether the economy is strong today.

It’s whether that strength can survive the combination of persistent inflation, higher borrowing costs and potentially softer employment.

What I’m watching: Consumer spending, labor-market conditions and inflation, together. If the consumer keeps spending and employment remains healthy, economic resilience could continue. If either begins deteriorating materially, the outlook changes quickly.

2. How High Can the 10-Year Treasury Go Before Stocks Care?

The 10-year Treasury yield crossed 5% in September, reaching its highest level since 2007. And is now above 5.20% That’s a big number.

But what’s been almost as interesting as the move in bonds is the reaction, or lack of reaction, from stocks. Equities have largely shrugged it off.

That makes one of my biggest questions for the fourth quarter surprisingly simple:

How high can Treasury yields go before the equity market finally cares?

There isn’t necessarily a magic number.

Why yields are rising matters just as much as how high they go.

If yields are moving higher because economic growth is stronger than expected and companies are generating better earnings, stocks can potentially absorb higher rates.

That’s very different from yields rising because inflation expectations are deteriorating, investors are demanding greater compensation for holding long-term government debt or concerns about fiscal deficits and Treasury issuance are increasing.

Eventually, though, higher yields change the math.

A Treasury yielding around 5% becomes meaningful competition for investor capital. Higher interest rates raise borrowing costs for businesses. They increase financing costs for households. And they increase the discount rate investors apply to future corporate earnings.

That last point is particularly important for equities with valuations heavily dependent upon profits expected many years into the future.

Markets have been remarkably tolerant of higher yields so far. But tolerance has limits. And I’m not convinced we know exactly where that limit is.

What I’m watching: Not simply whether the 10-year Treasury continues to move meaningfully higher, but how stocks respond when it does. If equities suddenly stop shrugging off rising yields, that could tell us more than the yield itself.

3. Is the Broadening Equity Market Real?

One of the more encouraging market developments of 2026 has been what’s happening beneath the headline indexes.

For years, investors have heard some version of the same criticism:

The market is being carried by a handful of mega-cap technology companies. There was plenty of truth to that. But this year we’ve started seeing signs of broader participation.

Value stocks have outperformed growth stocks. Small-cap stocks have participated. And investors have increasingly found opportunities outside the familiar mega-cap technology names.

That doesn’t mean the AI story is over. Far from it.

AI enthusiasm remains powerful. Technology companies continue to invest enormous amounts of capital, semiconductor demand remains strong, and the Nasdaq recently returned to record territory as enthusiasm around AI adoption and monetization accelerated again.

What has changed is that AI doesn’t necessarily have to be the only story. That’s important.

Healthy equity markets don’t require every stock to go higher. But broader participation can make a rally less dependent on a handful of companies continuing to deliver extraordinary returns. It also creates more interesting portfolio-construction opportunities.

Value versus growth.

Small versus large.

Domestic versus international.

Technology versus industrials, financials and other sectors.

For investors who spent much of the past decade asking whether diversification was actually helping them, 2026 has provided a reminder of why diversification exists in the first place.

But now comes the test.

Can value and smaller companies continue participating while mega-cap growth and AI remain strong, or does market leadership narrow again?

There’s also an important connection to Treasury yields.

If long-term yields continue climbing, highly valued growth companies could face greater valuation pressure because more of their expected earnings sit farther in the future.

That could reinforce the rotation toward value and other parts of the market.

But there’s a catch.

If yields rise far enough to materially slow the economy and hurt corporate earnings, small-cap and economically sensitive value stocks won’t be immune either. So the question for the fourth quarter isn’t simply whether stocks go higher.

It’s what kind of stocks lead if they do.

What I’m watching: Market breadth, value versus growth, small versus large, earnings revisions and whether gains continue spreading across sectors.

4. Can Emerging Markets Finish What They Started?

Emerging-market equities have quietly become one of the more interesting stories of 2026.

And I think “quietly” is important.

U.S. investors naturally spend most of their time talking about the S&P 500, the Magnificent Seven and AI. Meanwhile, significant moves have been occurring outside the United States.

But there’s an important lesson inside the emerging-market rally:

Emerging markets are not created equialy.

The differences across countries this year have been enormous.

Thailand (ETF: THD) and Singapore (ETF: EWS), for example, were up roughly 26% and 24%, respectively, through mid-September. Indonesia (ETF: EIDO), by comparison, was down roughly 34%.

Same broad geographic region. Very different outcomes.

The broader lesson is something investors occasionally forget. Buying “emerging markets” isn’t necessarily making one macroeconomic bet.

You’re gaining exposure to different economies, demographics, currencies, industries, political environments and growth drivers. That’s diversification.

And after years when U.S. equities dominated global portfolios, international markets are giving investors a reason to revisit some of their assumptions.

The fourth-quarter question is whether that momentum can continue, and whether leadership can broaden across emerging markets rather than remaining concentrated in a handful of countries and themes.

What I’m watching: Earnings, currencies, country-level fundamentals, global capital flows and whether investors continue looking beyond the United States for growth.

5. Can the Wisconsin Badgers Please Make a Bowl Game?

Now for the most difficult forecast.

The Wisconsin Badgers are currently sitting at 3–1.

They were handled pretty convincingly by Notre Dame, but responded with wins over Western Illinois, Eastern Michigan and Penn State.

The win at Happy Valley was a huge step in the right direction and hopefully a momentum builder.

As someone who grew up in Wisconsin and has spent more Saturday afternoons watching Badger football than I’d probably care to calculate, I’m accustomed to entering a season with optimism.

Recently, that optimism has required a little more work.

I spend a lot of time thinking about probabilities, risk, economic scenarios and market expectations. Unfortunately, none of my models appear capable of explaining Wisconsin football.

So I’m going to keep this one simple.

Six wins. A bowl game.

That’s all I’m asking.

Well…maybe seven wins.

Let’s not get carried away.

What I’m watching: Wins. Please. Just wins.

The View From 6,230

The final three months of 2026 should tell us quite a bit about where markets may be headed next.

Can the economy remain resilient?

Can stocks continue absorbing Treasury yields that are above 5%?

Can equity leadership continue broadening beyond mega-cap growth?

Can emerging markets build on a strong year?

And can Wisconsin find at least three more wins?

The temptation with each of these questions is to make a prediction. But investing isn’t really about correctly predicting every outcome. It’s about identifying the variables that matter, watching how they change and adjusting when the evidence changes.

That’s especially important today.

A strong economy can be good for earnings but bad for inflation. Higher Treasury yields can reflect economic strength until they begin tightening financial conditions.

Broader equity participation can make a bull market healthier, but only if earnings ultimately support it.

Strong emerging-market performance can create opportunities, but the enormous differences between countries remind us that selectivity still matters.

Markets rarely give us simple answers. That’s why I’ll be watching these five questions closely over the next three months.

And when it comes to the first four, I’ll follow the data.

For number five?

I’ll probably just yell at the television.

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This week on Views from 6,230: https://www.youtube.com/watch?v=tsF3IxwdQ_o&t=422s

This week on Views from 6,230: The S&P 500 Concentration Trap and a Tax-Smart Way Out

I had the pleasure of speaking with Bill Davis, managing director and founder of Stance Capital, to discuss whether the cap-weighted S&P 500 has become overly concentrated in mega-cap, highly correlated tech names and how index flows can exacerbate that risk.

The Week Ahead

Be on the lookout for our next episode of Views from 6,230, where I sat down with Meg Carpenter, CEO and co-founder of FiComm, to discuss FiComm’s The New Growth.  We explore findings that challenge the industry’s reliance on referrals