Arta Market Brief - September 2026: Multi-Expert Edition

Starting this month, we’re trying something a little different. Rather than hearing from a single voice, we’re bringing together perspectives from experts across our Investments team, covering investment advisory, private markets and derivatives. The aim is to give you a broader view of what we’re seeing across markets, what we think matters, and how different parts of the investment landscape connect.

1. Introduction - Matt Linker

The central question heading into September is no longer whether markets can absorb higher rates and heavy AI investment, but which businesses and portfolios can translate that environment into durable cash flow. Recent performance has broadened beyond the most crowded AI names: over the past three months, the S&P 500 excluding the AI cohort outperformed the broad US AI basket with substantially less volatility. That isn’t to say you shouldn’t be invested in AI, but is a reminder that a powerful theme can still be a poor guide to security selection.

In both public and private credit markets, high-quality issuers are financing an unusually large share of the AI build-out, while data-center project finance is adding supply lower in the capital structure. Ratings alone therefore tell less of the story than they used to; balance-sheet flexibility, cash-flow visibility and refinancing needs deserve closer attention.

We see rates as remaining the cross-asset hinge, and the hinge moved last Friday. In his first Jackson Hole address, Kevin Warsh said the Fed's predominant focus right now should be on prices, called the inflation numbers concerning, and - while acknowledging that this summer's readings came in better than expected - said they do not tell him that underlying trends have meaningfully improved. Markets went from pricing roughly a 30% chance of a September hike to slightly better than even For Arta members, the practical takeaway is balance rather than a single directional call: remain invested, diversify your sources of return, avoid relying on crowded exposures, and make sure portfolio risk is deliberate. In the sections that follow, Brandon, Peter and Yekaterina examine how these cross-currents are showing up in public markets, private markets, and derivatives - and what they are watching next.

2. Public Markets - Brandon Ho

August was a data heavy month, and the numbers told a more layered story than calm equity markets suggested. Global stocks resumed their climb after a largely flat June and July, helped by an earnings season that beat expectations and valuations that have cooled off their highs from last year. AI spending kept accelerating too, with more signs that the investment is starting to show up in actual revenue, not just spending. 

Beneath that, the broader macro picture was softer. Inflation eased a touch, growth held up but leaned heavily on consumer spending and AI capex, and July's jobs report came in below expectations, with elevated wage growth starting to show signs of cooling. Bond yields moved higher: short-dated yields led after Chair Warsh's Jackson Hole address, while longer maturities held up comparatively well. The market spent most of August debating when rate cuts might arrive and ended it pricing a better-than-even chance of an increase in September.

For members, gold's move this year is a reminder of why staying diversified matters. Few expected gold to have the kind of year it has had, held back at times by higher inflation and rate expectations in the wake of the Middle East crisis, but supported by steady central bank buying through the summer and a pickup in gold linked fund flows. Moves like this are a good example of why portfolios spread across a range of assets, rather than concentrated in whichever theme has performed best recently, tend to hold up better through sharp shifts in any single asset class. Chasing what just worked, or abandoning what has lagged, is a natural instinct, but staying diversified is usually the more useful approach.

We are watching two near-term events before the Fed's September meeting - the August jobs report and the August inflation data (the latter of which carries a scheduled methodology revision we expect will reduce core PCE readings),  whether equal-weighted S&P 500 continues to outperform cap-weighted, and how durable this year's asset class moves prove to be as the picture develops into year end.

3. Private Markets - Peter Harano

As one might expect, private markets report changes on a lag, which rewards investors willing to take a longer-term view when reading developing trends. A continually uncertain global macro picture, rates staying higher for longer, and an enormous AI build-out are the key themes materialising (SG) / materializing (US) across the private markets landscape. 

Venture has been the standout. Global funding hit a record $510 billion in the first half of 2026 and venture-backed exits were the strongest in years, helped by SpaceX coming to market. The important nuance is how concentrated it has been. AI absorbed the large majority of US venture dollars, and a small group of companies took much of that. Access to these leading companies is not evenly distributed, which emphasises the importance of manager selection and working with leading VCs with differentiated networks. When seeking exposure it’s important to be mindful of structures and alignment, and avoid fee-laden structures that could dilute potential returns.

Private equity, on the other hand, is still generating strong returns while working through a slower distribution cycle. Exits have improved yet remain concentrated at larger transaction sizes, while cash back to investors sits below historical norms. In response, the secondary market has reached record scale, with substantial capital available to buy fund stakes and to back sponsors holding quality assets for longer. Many investors increasingly view secondaries as a permanent fixture of liquidity going forward, which is something to monitor as exits remain slow.

Of the areas mentioned here, private credit is the one members ask about most. The asset class continues to expand, even as some evergreen vehicles have seen elevated redemption requests. Institutional capital is also broadening beyond core direct lending into adjacent credit strategies, such as asset-based finance and residential loans. Real assets remain anchored to power and data centre (SG) / center (US) demand, where electricity rather than capital is the binding constraint. Value-oriented investors have been returning their focus to real estate, where fundamentals have steadied after a long reset and transaction activity is beginning to pick up.

The opportunity set outside public markets is wider than it has been in years, and so is the distance between a good manager and an average one. Manager selection remains a paramount component of resilient portfolios, especially to properly take advantage of the opportunities available across the private markets.

4. Derivatives - Yekaterina Alferova

In derivatives, we’re looking for places where we have a strong investment view and where volatility creates an attractive opportunity to express it. That naturally puts individual stocks and sectors with higher implied volatility on our radar.

Individual stocks still carry pockets of higher implied volatility versus indexes, but that gap - dispersion - narrowed fast last month as earnings cleared out. Q2 was strong on almost every measure and stocks still sold off on beats as readily as misses, moving more than the options market had priced. With that event risk gone, single-name vol came down hard and the CBOE dispersion index is off its late-July high by about a quarter in five weeks. Stocks are largely moving on their own news, so the dispersion is still there, just narrower than in July.

The other change is at the long end. The 30-year Treasury yield hit a 19-year high on the 17th, and Bessent's surprise move two days later to double buybacks of long-dated Treasuries pulled it back off. That revived the debasement trade, and gold, silver and crypto all ran. Gold's implied vol now sits well above the index's. Tech carries the highest implied vol of any sector and has whipsawed to match - semis rallied on AI spending headlines mid-month, sold off as yields hit the AI complex, then recovered into Nvidia's earnings - with materials just behind on gold and copper, and real estate at the bottom.

Practically, broad index exposure isn't paying much - the premium sits with individual names and sectors, thinner than a month ago, so selection matters more than in July. Tenor is pricing differently too - a steeper curve makes terms past a year relatively more attractive, since higher rates further out leave more to work with. Downside protection was cheap in early August, but put demand picked up mid-month and skew steepened sharply. It's faded only partially since and still sits above where the month started, so selling downside is better paid now than it was three weeks ago.

We're watching whether vol on individual names stabilizes here or keeps compressing. A lot of investors are in versions of the same trade right now, and crowding like that tends to unwind all at once, with everything moving in lockstep again. July headline PCE ran hot at 3.7% but core was softer, and with the dollar and real yields both drifting lower the metals bid held through the print. A reversal in either is what would challenge it.

6. Looking Ahead - Matt Linker

As September begins, our base case remains constructive, but the margin for error is narrower than it was earlier in the year, and Jackson Hole narrowed it further. Rates are still the most important swing factor, and the question itself has changed: for much of the year the debate was when cuts would arrive, and is now whether the next move will actually be a hike. We think the Fed holds in September. Underlying inflation looks better on most measures than the single figure the Chair emphasized, and the August inflation data carries a scheduled methodology revision we have expected for some months to lower the year-on-year rate.  However, our view is that portfolios should not depend on getting the Fed’s next move right. 

In equities, the AI investment cycle still looks real, but recent performance is a reminder that a compelling long-term theme does not make every AI-linked stock equally attractive. We expect results to depend increasingly on which companies can turn heavy spending into sustainable revenue and cash flow. That argues for broad, diversified exposure - especially into businesses supplying the build-out - rather than chasing whichever names have risen fastest.

The same focus on cash flow applies in credit. A high rating remains useful, but it does not by itself capture how much a borrower is issuing, when it must refinance, or how resilient its business would be if growth slows or is otherwise disrupted. In private markets, funds are returning cash more slowly and the market for buying existing fund stakes is growing. That may create opportunities, but the gap between strong and average managers is likely to remain wide.

Finally, gold’s recent strength and sharp shifts in currencies and bond yields show why diversification still matters. We would be prepared for occasional bursts of volatility, particularly where many investors hold similar positions. For long-term investors, the practical message is not to retreat from markets, but to stay selective: diversify sources of return, avoid accidental concentration, and use periodic rebalancing - not the latest headline - to keep risk aligned with your goals.