Smart Investor: A Risky Outlook for Stocks in Q4, Midterm Elections, and the Smartest Moves in Bonds

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In this week’s newsletter:

• Weekly Market Update: Stocks Gain 1.03% as Utilities Rise, Industrials Fall
• Why Are Stocks and Bond Yields Rising at the Same Time?
• Q4 2026 Stock Market Outlook: Individual Stock Selection Looks Increasingly Important
• Why Cash Is Still King for Short-Term Goals
• The Smartest Moves for Bond Investors Today, and What to Do When You Have Too Many Investments
• What the Midterm Elections Will Mean for Markets
• Marvell Technology Stock: Raising Valuation on Bullish Long-Term Guidance
• Could MediaTek Threaten Broadcom’s Lead in AI Chips?
• What’s Happening in the Markets This Week

US stocks hit a new record high this week, with the Morningstar US Total Market Index climbing 1%. Those gains came even as bond yields continued rising. Colin Laidley digs into the forces underpinning an unusual scenario: a resilient economy and booming corporate profits.

Looking ahead to the end of 2026, some are wondering how long the resilience can last. In Morningstar’s outlook for the fourth quarter, Dave Sekera points out that while the US equity market is trading at a 10% discount to Morningstar’s fair value estimates, just seven mega-cap technology stocks are responsible for that undervaluation. All are closely tied to the AI trade. Read more about why Sekera believes the US market is entering an especially risky phase, and how he thinks investors should be positioned through the end of the year.

Even as yields rise to multidecade highs, Morningstar portfolio strategist Amy Arnott explains why she’s still cautious on longer-term bonds. From an asset allocation standpoint, she says cash is still the best choice for investors with shorter time horizons. Arnott also sat down with Ivanna Hampton to answer questions from readers, covering everything from bond ETFs to TIPS ladders to the best strategies for limiting capital gains.

It’s hard to believe, but the US midterm elections are just a few weeks away. I looked at the key issues shaping the races—AI data centers, gas prices, and more—and what the likely outcomes might mean for portfolios.

Back in the stock market, semiconductor names remain front and center. We highlight new research from technology analyst William Kerwin. He’s still bullish on chip designer Marvell MRVL, even though the stock has tripled over the past year. You can also watch Kerwin’s conversation with Dave Sekera, where he digs into Broadcom’s AVGO competitive advantage.

As always, visit our Markets page for our latest coverage, along with our full weekly calendar of key upcoming data and events.