Rates Keep Rising… And The Quiet Playbook For A Noisy Market 9/28/26

Rising rates are quietly cracking rate-sensitive sectors (small caps, banks, housing) while AI strength papers over broader market weakness.

• Rates hit multi-year highs: 10-year around 5.3%, 2-year up more than 50bp this month; traders debate whether Fed hikes again next month.
• Divergence widening: Small caps have underperformed S&P by ~11% since July peak, travel/leisure and banks selling off, while AI/tech trade masks the weakness (Tim Seymour, Mike Khouw).

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