Smart Investor: The Fund Managers Dialing Back Risk, Rieder on Inflation, and Questionable Tokens

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This week’s highlights:

• Weekly Market Update: Stocks Gain 1.09% as Technology Rises, Energy Falls
• Higher Rates Have These Top Stock Fund Managers Taking a More Defensive Stance
• Inflation Is Peaking and Will Fall, BlackRock’s Rieder Says. Here’s Why
• DBRS Morningstar: Rising Rates to Hit Private Corporate Credit First and Hardest
• Oracle: Data Center Force Majeure Implies Possibility of $25 Bln Revenue Delay
• Stock Tokens Are Coming to the US. Are They Good for Investors?
• What’s Happening in the Markets This Week

Heading into the final days of the third quarter, the stock market is holding near levels first seen in early August. Since then, stocks have largely carved a sideways path not far from record highs. With small gains this past week, the Morningstar US Total Market Index is on track for a roughly 3% gain for the quarter and is up just shy of 14% in 2026.

While the big spike in bond yields hasn’t done visible damage to stocks, it is perhaps throwing sand in the gears of the bull market. Some veteran stock fund managers say the rise in bond yields has them turning defensive. Sarah Hansen checked in with fund managers from Capital Research, T. Rowe Price, and other shops to look at where they are turning in the stock market as they dial back on risk.

When it comes to the inflation concerns that are playing a role in driving interest rates higher, Rick Rieder, BlackRock’s chief investment officer of global fixed income, sees better news ahead. While Rieder says the Federal Reserve doesn’t have the ability to influence some sources of inflation, a coming productivity boom should lessen upward pressure on prices. Check out Leslie Norton’s great interview with Rieder on where he thinks the best opportunities in the bond market lie.

But with long-term US Treasury yields continuing to march higher, the ripples are bound to spread. Analysts at Morningstar DBRS hunted for corners of the debt markets where issuers are most vulnerable. Their conclusion: private credit is in the crosshairs. You can find out why—and where else they see risks building—in our story here.

Speaking of risks, a potentially significant development in the artificial intelligence trade outlook came from news that Oracle has warned about potential delays in a critical data center project in New Mexico. While Oracle stock dipped on the news, you can read here why Morningstar analyst Luke Yang thinks investors should be taking this issue more seriously.

Lastly, we take a look at the latest product being touted by digital investment boosters: stock tokens. Colin Laidley explains how stock tokens work and whether they make any sense for most investors.

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