MARKETS
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Despite the elevated interest rate environment and heavy AI capital expenditure concerns, August was an overall strong month for the stock market, especially among the energy and technology sectors. The global equity index (MSCI ACWI IMI) increased 2.81% in August and was up +14.89% YTD. The S&P 500, which tracks large cap U.S. stocks, increased 2.72% in August and was up +13.14% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased 0.98% in August and was up +20.01% YTD. The International developed equity index (MSCI EAFE) increased +1.99% in August and was up +13.81% YTD. The emerging markets index (MSCI EM) increased 3.37% in August and was up +24.08% YTD.
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In August, the bond yield curve slightly flattened; the 30-year U.S. Treasury bond yield decreased -2 bps to 5.25%, the 10-year yield remained unchanged at 4.75%, and the 2-year yield increased +6 bps to 4.34%. The Bloomberg U.S. Government Credit Index, a proxy for the U.S. fixed income market, increased 0.35% in August and was down -0.45% YTD.
ECONOMIC AND GEOPOLITICAL HEADLINES
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According to the Bureau of Economic Analysis, the second estimate for U.S. real gross domestic product (GDP) increased in the second quarter of 2026 by +1.5%, down from the first quarter 2026 increase of +2.1%.
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The August Services PMI was 55.4%, up +1.3% from July. The August Manufacturing PMI was 54.6%, down -1.0% from July. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
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As reported by the Bureau of Labor Statistics on September 4, 2026, August non-farm employment increased by 162,000 jobs, while the unemployment rate remained unchanged at 4.1%. In August employment increased in food services and in local government education while the information industry lost jobs. Average Hourly Earnings (wages) increased by 3.1% year-over-year.
PERFORMANCE UPDATES
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The Equity Fund increased 2.02% in August and is up +14.74% YTD. The Bond Fund increased 0.30% in August and is down -0.57% YTD. The Stable Value Fund increased +0.24% in August and is up +1.79% YTD. The Northern Trust World Selection Index Fund increased +3.07% in August and is up +13.20% YTD.
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The Sustainable Balanced Fund increased by 1.76% in August and is up +6.96% YTD. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040; TAD 2045; TAD 2050; TAD 2055; TAD 2060; and TAD 2065 returns were up 0.61%, 0.87%, 1.17%, 1.36%, 1.50%, 1.63%, 1.77%, 1.78%, and 1.79% respectively for August and are up 3.87%, +5.45%, +7.36%, +8.84%, +10.05, +11.20%, +12.25%, +12.31%, and +12.29% respectively YTD.
Note: Fund performance values are estimates.