The latest Morningstar Smart Investor newsletter focuses on a shifting interest-rate environment, with the Federal Reserve potentially preparing to raise rates for the first time since 2023 as the 10-year U.S. Treasury yield approaches 5%. The stock market remains just below record highs despite modest losses last week, supported by strong earnings and substantial artificial-intelligence spending. August Consumer Price Index data was broadly in line with expectations, but inflation remains stubbornly high and markets sharply increased the implied odds of a Federal Reserve hike at the coming meeting. Higher yields have pushed bond prices lower, although Morningstar senior US economist Preston Caldwell says investors have no reason to panic, while one analyst describes the development as “a great thing” for income investors. The newsletter also reviews rate increases by the European Central Bank and the expected move from the Bank of Japan, including the potential effect on the yen. Other features examine the growing weight of technology and AI stocks in portfolios, why Chinese AI stocks have not yet delivered comparable gains for US investors, and how companies emphasizing dividends and share buybacks are outperforming businesses focused on data centers. The issue also includes a weekly calendar of upcoming economic data and events and directs readers to Morningstar’s Markets page for further coverage.