Stock Funds Are Up 12.6% for Year So Far -- WSJ

By William Power

The stock market has lost a lot of its momentum, but fund investors are still having a relatively momentous year.

Investors have plenty to concern them, including inflation, a possible Federal Reserve interest-rate increase and U.S.-Iran tension. And now the momentum has waned for shares, like Nvidia, that are tied to artificial intelligence.

But despite all those headwinds, August was another positive month for U.S. stocks and fund investors, boosted in particular by shares of software companies that posted strong earnings.

The average U.S.-stock mutual fund or exchange-traded fund posted an average total return in the month of 2.4%, according to statistics from LSEG, to push the year-to-gain to 12.6%. (See Mutual-Fund Yardsticks table.)

"While the fall months tend to be volatile for stocks, the solid fundamentals that pushed stocks to record highs this summer remain firmly intact," says Carol Schleif, chief market strategist at BMO Wealth Management. That, she says, "bodes well for investors who are able to look beyond any near-term chop caused by seasonality, geopolitics and the midterm elections."

International-stock funds-which posted a rare win against U.S. funds last year, amid tariffs and trade wars-were up 2.1% on average in August, and are slightly ahead of their U.S. counterparts with a 13.4% gain so far in 2026.

Bond funds gained in the month. Funds focused on investment-grade debt (the most common type of fixed-income fund) were up an average 0.4% to leave them with a 0.3% decline so far in 2026.

Meanwhile, a Treasury selloff has been pushing up global bond yields. Schleif calls that "a not-so-subtle message to policymakers that the bond vigilantes are not thrilled with the current trajectory of fiscal affairs." Still, those higher yields present more options for investors at a time when they might need them, she adds.

FINANCIAL FLASHBACK

A look back at Wall Street Journal headlines from this month in history

-- 25 YEARS AGO: 9/11 Terrorism and the Markets Shutdown

In striking the World Trade Center on Sept. 11, 2001, terrorist hijackers not only reduced the Twin Towers to rubble, but they also struck a blow against the nerve center of U.S. finance. The New York Stock Exchange and other U.S. markets never opened on that Tuesday, and would stay closed for the rest of the week.

When the markets reopened six days later, patriotism flowed freely despite price declines.

A more-prolonged shutdown would have eroded investors' faith in the markets, officials worried at the time. "Keeping the markets closed shows that terrorists brought you to bay, and it also creates more uncertainty," said Gary Gensler, a former Treasury official who oversaw financial markets, and a future financial regulator, in a Wall Street Journal article the day after 9/11. Open markets "allow for a lot of economic pressures to be relieved in an orderly way," he added.

The reopening on Sept. 17, the Monday after 9/11, was a feat that many investors and market officials cheered given the logistical hurdles of working in the shadow of Ground Zero. "The fact we were able to do a complete day of trading without any disruptions is a home run for the marketplace," Matt DeSalvo, head of North American stock trading at Morgan Stanley, told the Journal that day.

The Dow Jones Industrial Average on Sept. 17 dropped 684.81 points, the steepest point decline ever at that point, in what was also at the time the most active day of trading in NYSE history. But the 7.13% drop was far from the biggest percentage decline, and the fact that markets didn't fall further was seen as a relief.

Airlines and travel-related stocks were among the worst performers when trading resumed. The Dow Jones Transportation Average had its second-heaviest percentage loss ever. Rare advancers were defense stocks such as Northrop Grumman and gold stocks such as Newmont Mining.

Professional investors said the day's trading was skewed by panic selling and by the decision of many pros to wait until emotions settled. But stocks did get some love as a horde of investors had pledged to buy stocks yesterday to help prop up the market in a show of patriotism, the Journal reported. Said one such investor: "I want to be part of showing these people that the American economy is stronger...than ever. I want to be part of something: this is my city, my country."

Ultimately, it took the stock market just one month to recover the ground lost after the Sept. 11 attacks. By Oct. 11, U.S. stocks restored the last of the $1.38 trillion in market value that was lost in the declines.

-- 30 YEARS AGO: "On-Line Investing Flourishes as Brokers Slash Commissions on Computer Trades"

-- 50 YEARS AGO: "Pound Continues Record-Breaking Fall to Under $1.69 in 'Scary' London Market"

-- By Simon Constable

(END) Dow Jones Newswires

September 07, 2026 10:00 ET (14:00 GMT)