August was another positive month for investors, supported by strong corporate earnings and continued resilience in the U.S. economy. Earnings have been particularly encouraging, with many companies continuing to deliver solid profits despite an economic environment that remains somewhat uncertain.

One area we are watching very closely is interest rates. Longer-term Treasury yields have been moving higher, which can put pressure on both stock valuations and borrowing costs throughout the economy. Higher rates are not necessarily a reason to become overly defensive, but if they continue rising, they could eventually become a meaningful headwind for markets.

For now, corporate earnings remain a positive, but also something we watch very closely to any changes here. Ultimately, earnings are what support stock prices over the long run, and the strength we’re seeing is reason we believe the markets have been up for the year so far.

As always, we continue to monitor the balance between economic growth, inflation, interest rates, and corporate earnings and will make adjustments to portfolios when we believe conditions warrant them.