Finance
The US economy may be on 'thinner' ice than investors think
Investors are increasingly confident the US economy will achieve a “soft landing,” a scenario in which higher interest rates lead to lower inflation without a major hit to economic growth.
On the surface, it appears all signs point to that outcome. Inflation has eased. The economy is still expanding. Consumer confidence has risen. Retail sales are healthy. Corporate profits remain strong. And stocks continue to hover at record highs, with the Federal Reserve on tap to cut interest rates as soon as its next meeting on Sept. 18.
But one strategist warned on Yahoo Finance’s “Stocks in Translation” podcast that there are cracks under the surface.
“We’re skating on ice that’s a bit thinner than a lot of people presume,” said Michael Darda, chief economist and macro strategist at Roth Capital Partners.
Darda pointed to a rising unemployment rate and elevated earnings expectations, both of which contributed to the stock market routs seen at the start of August and September.
“It’s not unprecedented to have a slowdown period that looks like a soft landing, and then a recession ends up taking shape,” he said. “That’s sort of unexpected now because many have been lulled into this idea that the soft landing is going to be a permanent state of affairs for the business cycle. Equity market valuations reflected that coming into the summer.”
“But there’s been some cracks in the business cycle,” he cautioned, noting expectations for the economy, corporates, and the stock market have remained at “super high” levels.
To that point, the S&P 500 shed 2% on Tuesday, dragged down by the tech sector after Nvidia (NVDA) earnings didn’t deliver enough of a beat to satiate investors’ appetites. Stocks seesawed in the subsequent days as markets struggled to find their footing following the sell-off.
“What’s unfolding now actually makes a lot of sense to me,” Darda said of the pullback. “We’re seeing companies that had been soaring off of repeated beats on either revenues or earnings not do so well in this most recent period.”
The recent drawdowns point to how the current market — one in which investors consistently chase hot stocks and hot areas like artificial intelligence — can be a “dangerous” game, according to Darda.
“What that tells me is that the expectations have just gone up so much. It’s impossible to beat expectations indefinitely. Eventually they’ll catch up,” he said. “We’re in a bit of a frenzy here. And if things start to go wrong, whether it’s the earnings not living up to expectations or the business cycle faltering, that’s when you see stock markets roll over in potentially a material fashion.”
‘Choppy waters’
But it hasn’t just been earnings. The jobs market is also telling a particular story.
Last month, the July jobs report spooked markets after unemployment unexpectedly rose to 4.3%, its highest level in nearly three years. The move higher also triggered a closely watched recession indicator known as the Sahm Rule.
The rule, which has accurately predicted recessions 100% of the time since the early 1970s, measures the three-month average of the national unemployment rate against the previous 12-month low. It’s triggered when unemployment rises 0.5% from that level.
Traders instantly panicked that the economy was slowing more than anticipated. But then the debate ensued: Why was unemployment suddenly seeing an uptick?
Economists and strategists began to lay out the possible scenarios, including a theory that above-trend immigration is driving up labor force participation rates, therefore pressuring unemployment as more workers enter the jobs market. This eased investor fears as stocks rebounded to finish August with wins across all three major indexes.
But Darda said the rise in unemployment is still “a bit concerning.” And he’s not completely sold on recent bullish commentary that higher unemployment doesn’t really matter as long as the economy keeps growing.
“4.3% is still an incredibly low unemployment rate level that looks quite good in the historical context,” he explained. “The problem, if there’s a problem, is that we’re up to 4.3% from a cyclical trough of 3.4%.”
“Those kinds of movements and the level tell us that the economy, if it’s still growing, is growing below trend or below the growth rate of potential,” he said. “There’s an exceptionally fine line between that and an actual recession.”
Investors will receive another update on unemployment Friday with the August jobs report on deck. Darda said that report could likely lead to even more market volatility in the weeks and months ahead.
“I do think we’re probably in an environment now where volatility is going to stay elevated,” he surmised. “The risk of a more material pullback and/or correction is quite high.”
Ultimately, his view is one of caution: “With what we saw for the last two years with this market backdrop, from these valuation levels, and based on where I think we are in the business cycle, I think we’re going to be in choppy waters for a little bit.”
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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DULUTH — The Duluth Homegrown Music Festival is seeking both new operational leadership and a solution to financial filing issues that caused the organization to lose its federal tax-exempt status, which it has not held since 2022.
The organization is currently operating as a taxable nonprofit, confirmed Don Ness, the former Duluth mayor who serves as president of Homegrown’s
board of directors.
Ness and the board are working to discern whether there might be any outstanding tax liabilities in the wake of an apparent filing lapse.
“It’s a serious matter that requires diligence to do things right, and to correct past oversight, and to make sure that we are in full compliance with all tax and regulatory requirements,” Ness said. “The board is 100% committed to that course of action.”
As the Duluth Monitor first reported, Homegrown had its federal tax-exempt status revoked in 2022 after failing to make required financial reports for three years. The Monitor also reported that Minnesota Attorney General Keith Ellison’s office has notified the organization it may be in violation of state law requiring the proper registration of soliciting charities.
Clint Austin / Duluth Media Group file photo
“All but one of us have been on for less than a year,” Ness said of the current board members. “We’ve been committed to saying, ‘hey, we need to improve the points of accountability.’”
The organization will also require new operational leadership. Co-directors Cory Jezierski and Dereck Murphy-Williams resigned earlier this month, after leading Homegrown through four successful festivals.
“My contract ended at the end of May, and I knew a few days later that I did not want to continue in that position,” Jezierski said. “Simply put, it was the best thing for my mental health. It’s a job that requires many, many hours and a lot of work, and it can be very stressful as well.”
Amy Arntson / Duluth Media Group file photo
Murphy-Williams did not respond to an interview request for this article, nor did preceding Homegrown director Melissa LaTour. According to LaTour’s
LinkedIn profile,
she was Homegrown director from 2016 to 2022.
Jason Beckman, a recent president who is no longer serving on the board, responded to a News Tribune email but did not provide an interview availability before this article went to press.
Ness does not believe the reporting lapses were due to any ill intent. He praised Jezierski and Murphy-Williams for their success managing festival operations. “They cared deeply about the festival,” he said. “It’s amazing to see that our community continues to support this really unique and special festival.”
“Those guys run a hell of a festival,” said Scott Lunt, festival founder and a current board member. “I think they needed help with bookkeeping.”
Clint Austin / Duluth Media Group file photo
By Jezierski’s account, issues with the festival’s tax status became apparent shortly after he became co-director. “We went to file taxes, they were rejected,” Jezierski said. “At that time we, of course, didn’t know why right away, but once we started pulling on that thread, we unraveled a whole lot of the problems that were going on.”
Jezierski said “it took a long time to try to get any sort of help” from the board, but said that by the time he and Murphy-Williams left the organization, “everything had been turned over to be reconciled” with a financial professional.
Ness, like Lunt, was deeply involved with Homegrown in its first decade but had not had an official role with the festival since then. After launching the festival in 1999 and running it on his own for several years, Lunt was “burnt out,” Ness remembered.
Derek Montgomery / Duluth Media Group file photo
After a transition period during which the festival was run in partnership with the Ripsaw newspaper, Homegrown established a nonprofit organization in 2006 with Ness as festival director. Ness subsequently stepped down when he was elected mayor in 2007.
By 2025, Ness was in his current position as executive director of the Ordean Foundation.
“I was approached by a couple of longtime music scenesters,” Ness recalled. “They said, ‘There are questions about (Homegrown’s) nonprofit status. There are questions about some governance issues. We’re concerned.’”
Ness agreed to join the board, and became president. The 2026 festival ran smoothly from an operational standpoint, but Ness found the financial reporting to be lacking.
Clint Austin / Duluth Media Group file photo
“The last board meeting that we had prior to the (co-directors’) resignations was intended to be an overview of the festival that was a month before,” Ness said. “I certainly felt very uncomfortable with how little financial information we were receiving.”
Lunt also joined the board in 2025, marking his first time serving in that capacity. He said the new board has been spending significant time addressing the accounting and reporting issues.
“Every year at Homegrown time I’m like, ‘I should get more involved,’ and then I don’t,” Lunt said. “Then this board thing came up, and it was kind of sold to me as, like, four meetings a year. I was like, ‘Oh, that’s perfect.’ And now we’re meeting weekly.”
Clint Austin / Duluth Media Group file photo
Although it’s unclear how the organization’s finances will look when the accounting and reporting issues have been fully addressed, along with any outstanding tax liabilities, both Ness and Lunt said they are confident the annual festival will continue without interruption.
“The organization will continue,” Ness said. “The festival will continue. Homegrown is in no danger in terms of its viability.” The financial documentation Ness initially received indicated budgeted revenues of about $140,000, against about $130,000 in expenses.
“Financially, I think we’re in a great spot. We have the money to hire the (financial) professionals, and we have (done so),” Lunt said. “We were hoping that we could get all this sorted out before it had to become more public.”
“We poured countless hours into this festival, and this is how it ends, with everyone talking about this,” Jezierski said. “It’s rough.”
“There’s a DIY ethos that is really at the core of Homegrown,” reflected Ness. “We’re throwing a music festival that isn’t waiting for some famous band from the East Coast to bless us with their presence. We are doing this on our own.”
Clint Austin / Duluth Media Group file photo
That DIY spirit also means “you’re kind of passing wisdom down from person to person, and sometimes that’s imperfect.” Ness continued. “The ways that we do things evolve over time, because it’s not a buttoned-down corporate sort of thing. That can create its own set of challenges.”
“It’s self-supporting,” said Lunt about the festival. “It’s widely volunteer-run. You do need to pay a couple people, obviously, to keep track of some things, but it’s going to be strong into the future. It’s gone through its bumps before.”
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NEW YORK and SINGAPORE, June 19, 2026 /PRNewswire/ — LUMIQ, an AI-native financial services company, today announced a strategic funding round to scale auto-decisioning for financial institutions across the United States and Southeast Asia. The round was led by Bajaj Finserv, one of India’s largest and most diversified financial services groups, with participation from existing investor Info Edge Ventures.
Right now, thousands of customers are waiting for a policy to be issued, a loan to be disbursed, a claim to be adjudicated, because somewhere an FSI employee is drowning in decisions, held back by the risk of getting it wrong. Today, when e-commerce delivers the same day, banks and insurers still decide in weeks. We built LiteCone to take that burden: AI decides the routine cases, completely and accountably, so humans spend their judgment on the one case that actually needs it. This round lets us bring that to every financial institution in the markets that matter most.
Shoaib Mohammad, Co-founder and CEO, LUMIQ
From AI that assists to AI that decides
For decades, financial institutions have bought technology that made their people faster — faster data, faster scoring, faster copilots. The decision still landed on a human. LUMIQ is changing that. Through its LiteCone platform, the company deploys AI agents that read the file, apply the institution’s own guidelines, and reach the decision end to end — escalating only the cases that genuinely require human judgment. The output is not a recommendation. It is a decision, with full reasoning attached, cross-referenced to policy, and defensible under audit.
The results in production speak clearly. At a leading life insurer, LUMIQ’s LEO agent decides 75–80% of underwriting cases with zero human touch, reduced policy issuance cost by roughly 25%, and compressed turnaround from days to under eight minutes — running 24×7 with complete auditability. Across its client base spanning insurance, banking, and capital markets in India, the US, and Southeast Asia, LUMIQ now processes millions of decisions annually.
LiteCone turns a real financial-services role into a working AI agent in weeks. Every agent we deploy is consistent, explainable, compliant, and auditable by design — not as an afterthought. This capital lets us go deeper on the platform and broader across roles. And through our cloud and AI lab partnerships, institutions will increasingly find LiteCone already embedded in the platforms they run today.
Vaibhav Dobriyal, Co-founder and Chief Product Officer, LUMIQ
Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
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