BUSINESS

For many coffee drinkers, a favorite local coffeehouse is more than just a place to grab a morning drink. It’s part of a daily routine, a convenient meeting spot or a place to work, relax, and catch up with friends.

That experience is about to disappear for some customers as one of the world’s largest coffee chains prepares to close hundreds of locations across North America.

The closures could mean longer trips and fewer convenient options for people who rely on these stores, while also making another major step in the company’s effort to reshape its business and improve its performance.

Founded in 1971 in Seattle, Washington, Starbucks (SBUX) is one of the world’s largest coffeehouse chains and roasters, with thousands of stores globally. Its green logo and coffeehouse atmosphere have made the brand a recognizable presence in communities globally.

Starbucks is closing 250 stores in North America

Starbucks plans to close 250 stores in North America later this week after a review of its coffeehouse network, according to a company letter.

The company said it carefully reviewed its North America coffeehouse portfolio and identified locations where it could not consistently deliver the experience it wants for customers and employees or where it did not see a path to acceptable financial performance.

The closures represent about 1% of Starbucks’ more than 18,000 North American coffeehouses.

While the exact coffeehouses slated for closure have yet to be revealed, Starbucks said it will offer affected employees roles at other stores when possible or provide severance to those unable to secure another position within the company.

Starbucks Workers United said on September 24 that it is sending a formal request for information to Starbucks about the planned closures and will engage in bargaining at every unionized store affected by the shutdowns. The union said 20 of the approximately 700 company-owned U.S. Starbucks stores that have voted to unionize are among those closing.

“Every year we close some coffeehouses and open others as part of managing our portfolio,” said Starbucks COO Mike Grams in the letter.

“We are actively developing a strong pipeline of new coffeehouses and remain committed to growth in North America.”

Starbucks is closing 250 North American stores.Mike Kemp / Getty Images

Why Starbucks is closing stores

The closures are part of Starbucks’ broader “Back to Starbucks” strategy, which is designed to strengthen the company’s brand identity, simplify operations, and improve customer experience.

According to the company, its priorities include:

Modernizing beverages and food

Simplifying the menu to reduce friction and improve speed

Enhancing store design and operational efficiency 

Prioritizing coffee quality 

Empowering baristas

One of the goals of the strategy is to encourage customers to spend more time in Starbucks coffeehouses, with the company seeking to improve traffic and increase in-store purchases.

Starbucks has also been investing heavily in its existing stores. The company said it has now completed more than 1,000 coffeehouse uplifts across the U.S. and Canada and is accelerating its pace toward completing at least 1,500 by the end of fiscal 2026. The redesigned stores are intended to create a warmer, more comfortable environment where customers want to stay longer and connect.

Green Apron Service has also become Starbucks’ defining operating standard as the company works to improve service times and the customer experience.

The company said it will incur $300 million in restructuring charges from this round of closures, including $200 million in cash charges as it exits leases and pays employee separation benefits, and $100 million in non-cash charges from the disposal and impairment of coffeehouse assets, according to its latest SEC filing.

Previous Starbucks closures

The latest closures follow another round of shutdowns as Starbucks continues to reshape its store network.

In September 2025, the company closed 627 locations across North America and Europe as part of a broader restructuring effort and eliminated approximately 900 non-retail positions.

In May 2026, Starbucks also laid off an additional 300 corporate employees and closed some U.S. offices.

Starbucks sees improvement

The moves come after a period of weaker performance and a significant restructuring effort, but Starbucks is now reporting signs of improvement.

During the third quarter of fiscal 2026, the company reported:

Global comparable store sales: Increased 7.9% year over year

Global comparable transactions: Rose 4.2%

Global average ticket: Climbed 3.5%

North America comparable store sales: Increased 8.1%

North America comparable store transactions: Rose 4.5%

North America average ticket: Climbed 3.5%

Despite the closures, Starbucks continues to expand its overall store fleet. The company opened 175 net new coffeehouses during the quarter, ending the period with 41,304 locations.

However, its North America store count declined 2% to 18,371.

Starbucks had previously planned to open approximately 600 to 650 net new coffeehouses globally during fiscal 2026. The company has since lowered that expectation to about 440 net new stores, according to its latest SEC filing.

The change highlights the different directions Starbucks is taking with its store network: closing locations that no longer meet the company’s expectations while continuing to invest in stores it believes have stronger potential.

Here’s some of my previous coverage on more Starbucks news:

Starbucks launches 4 new fall items after Pumpkin Spice Latte debut

Starbucks makes some surprising additions to its fall menu

Starbucks brings back two viral drinks not seen in nearly a decade

“We have more work to do, but we’re relentlessly focused on reclaiming the third place and becoming the world’s greatest customer service company,” said Starbucks CEO Brian Niccol in the company’s earnings report.

Related: Starbucks launches 4 new fall items after Pumpkin Spice Latte debut

Looking for today’s NYT Connections hints? Some help and the answers for today’s game are right here to help keep your streak alive.

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Related: Walmart has a ‘very sturdy’ lockable 2-door storage shed for under $150

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Seizeen Shed and Outdoor Storage, $210 (was $400) at Amazon

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Ariana Grande’s ‘Thank U, Next’ becomes her first album to spend 200 weeks on the Billboard 200 as three of her releases chart simultaneously.

There is new information on Lioness season 4 and Neagley season 2, shows in a similar position as they wait to be picked back up.

Nobody likes changing their mind in public. Money managers do it anyway, because the alternative is being wrong with other people’s money.

Most of the time, those forecast updates are quiet. A firm nudges a number in a quarterly outlook, a few strategists repeat it on TV, and your 401(k) never notices.

This September is different. At the start of the year, some Wall Street banks were penciling in rate cuts for 2026.

Then the Iran war pushed oil above $100 a barrel, inflation refused to cool, and the Federal Reserve raised its benchmark rate on Sept. 16 for the first time since July 2023.

The bond market has done a lot of the Fed’s talking since then. The 10-year Treasury yield, which steers mortgage rates, closed at 5.11% on Sept. 23, its highest close since July 2007, The Hill reported.

That is the backdrop for a forecast change from a name sitting inside millions of retirement accounts.

Vanguard, the fund giant behind many Americans’ index funds and target-date funds, now expects the Fed to raise rates one more time before the end of 2026.

Vanguard now expects another Fed hike, pushing the target range to 4%–4.25%.Pakorn Supajitsoontorn / Getty Images

Vanguard raises its year-end interest rate forecast

“We expect one further hike, which would leave the Fed’s year-end target range for the federal funds rate at 4%–4.25%,” wrote the investment strategy group at Vanguard in a Sept. 17 note.

More Fed:

Scott Bessent sends signal on Kevin Warsh Fed rate hike

Your cash now pays 4.10% as Kiyosaki says to dump it

The Fed rate hike is actually good news for millions of Americans

The federal funds rate is what banks charge each other for overnight loans. The Fed set its target at 3.75% to 4% last week, so Vanguard’s call adds another quarter point.

The Fed moved after August data showed inflation risks “remained heightened” at both the consumer and producer levels, the note said.

Vanguard’s own economists frame the move as a one-time correction.

“We anticipate another rate hike by year-end, which we view as a recalibration of policy and the removal of prior accommodation rather than the start of a more sustained tightening cycle at this point,” wrote Josh Hirt, senior U.S. economist, in Vanguard’s U.S. outlook.

In plain English, Vanguard sees one more step up and then a hold.

Related: BofA drops stunning warning about Fed rate hikes 

Fed insiders are lining up behind the first half of that view. “In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion,” Fed Governor Michael Barr said in a Sept. 23 speech posted by the Federal Reserve.

Traders moved fast. The odds of an October hike jumped to 71% from 55% a day earlier, according to CME Group (CME) FedWatch data cited by CNN.

How a Fed hike reaches your mortgage and savings

The Fed sets only one short-term rate directly. Almost everything you pay or earn reacts to it, and to what bond traders think the Fed will do next.

Mortgage rates track the 10-year Treasury yield more closely than the Fed’s own rate. Vanguard’s note put the 10-year at 5.01% on Sept. 16, up 83 basis points this year, with the 30-year Treasury at 5.35%.

A basis point is one-hundredth of a percentage point, so that 83-point jump means borrowing got meaningfully pricier in nine months.

Yields kept climbing. “Today has been a perfect storm fueling the surge in bond yields across the curve,” Chip Hughey, managing director for fixed income at Truist Advisory Services, a unit of Truist Financial (TFC), told CNN on Sept. 23.

Home buyers feel it first. The average 30-year fixed mortgage rate rose to 7.12% last week, more than a two-year high, the Mortgage Bankers Association said, according to Reuters.

I ran the numbers on a $400,000, 30-year loan. At 7.12%, principal and interest come to about $2,694 a month, versus about $2,465 at 6.26%, where Freddie Mac’s weekly average sat a year ago.

That gap is roughly $228 a month, or about $2,700 a year, for the same house.

Where your rates stand after the Fed’s first hike since 2023

Fed target range: 3.75% to 4%, set Sept. 16, according to Vanguard.

Vanguard’s year-end Fed forecast: 4% to 4.25%, according to Vanguard.

10-year Treasury yield: 5.11% close on Sept. 23, according to The Hill.

30-year fixed mortgage: 7.12% average last week, according to the Mortgage Bankers Association.

Savings accounts: 0.64% national average annual percentage yield (APY) as of Sept. 23, according to Bankrate.

Chief economist Joe Davis draws a 5% line for stocks

Here is the part of Vanguard’s messaging that I think most investors will miss.

In a Sept. 18 video, Vanguard global chief economist Joe Davis was asked when rate hikes would start to really hurt markets. His answer set a specific bar.

“You would need to very likely take short-term interest rates materially higher than the 4% or so that the Federal Reserve recently raised toward,” Davis said in the Vanguard video. “Certainly north of 5% would put you in a territory at least before we would start talking about significant sort of downdraft in earnings potential and economic activity.”

He added, “That is not our baseline.”

In my analysis, the key word is “short-term.” Davis is talking about the Fed’s rate, which sits near 4%.

The rates households actually borrow at have already crossed his line. The 10-year yield is above 5%, and the 30-year Treasury yield hit 5.41% on Sept. 23, according to CNN.

So stocks can stay calm under Vanguard’s base case while your borrowing costs stay high.

What higher bond yields mean for your cash

For savers, Vanguard’s message is upbeat. “Higher policy rates have translated into meaningfully higher yields across many fixed income segments, creating a much stronger starting point for future returns,” the Sept. 17 note said.

I checked Vanguard’s own fund pages to see what that looks like in dollars. Vanguard Total Bond Market ETF (BND), an exchange-traded fund, showed a 30-day SEC yield of 4.89% as of Sept. 21, according to Vanguard’s fund page.

That SEC yield is a standardized Securities and Exchange Commission income measure. On $100,000, 4.89% works out to about $4,890 a year.

The same $100,000 in a savings account at the 0.64% national average earns about $640, according to Bankrate. The best high-yield accounts pay around 4%, Bankrate said.

There is a catch. Bond prices fall when yields rise, and BND is down about 1% so far this year on Vanguard’s fund page.

That is why time horizon matters. Money you need within a year is safer in insured savings or a money market fund, while bonds suit cash you can leave alone through a rough patch.

Why October could bring another turn for borrowers

Vanguard’s forecast rests on inflation cooling in 2027. If oil stays near $100 and prices keep running hot, the Fed could keep going.

Davis said it would take “material further aggressive rate hikes” driven by higher inflation to seriously hit financial conditions. That is his risk scenario, and the next Fed meeting on Oct. 27 and 28 will show whether it is getting closer.

Until then, the math favors a simple audit. Check what your cash earns, what your debt costs, and whether your bond money can wait out another hike.

Vanguard is betting on one more increase. Your savings should already be earning like that bet is right.

Related: Vanguard, Fidelity name the smarter alternative to selling stock

Three of the most powerful companies building artificial intelligence are working on something unusual. Rules for themselves, written by themselves. The federal government is largely on the sidelines.

It has been building for months behind closed doors. Now that it’s close enough to a real launch, the people involved are already arguing about who should run it.

Google, OpenAI, and Anthropic plan a self-regulatory safety body

The group has a name. Standards Authority for Frontier AI (SAFA). It has a target window of late 2026 or early 2027, according to Stocktwits. Key guidelines include:

Third-party testing before models ship

Rules for how labs report safety incidents

A framework that turns voluntary safety pledges into something that can actually be checked

The idea traces back to a July proposal from Google DeepMind CEO Demis Hassabis. He suggested a body modeled on the Financial Industry Regulatory Authority, the organization that oversees Wall Street brokers.

Funding would need to be substantial and come mostly from the industry, he proposed.

More AI:

Nvidia just made a move Wall Street wasn’t ready for

Microsoft just took sides in AI policy fight

OpenAI just disclosed something genuinely alarming

Government involvement was the original plan. The three companies initially wanted a public-private partnership with federal oversight.

That stalled after a draft White House executive order was put on hold. The administration told the companies to reach industry consensus first.

OpenAI’s Chief Global Affairs Officer Chris Lehane confirmed in mid-September the company had been in discussions with Anthropic and Google DeepMind for several weeks about a joint safety standards body.

CEO Sam Altman publicly backed the effort. The industry needs to work together on safety, he said, as CNBC reported.

AI safety push follows weeks of public alarm inside the industry

The timing lines up with a wave of unusually blunt warnings from AI executives. Anthropic CEO Dario Amodei published an essay on Sept. 12 titled “We Must Pace the Frontier.” He argued that AI capabilities are advancing faster than the industry’s ability to control them, calling for outside evaluators to get ongoing, employee-level access to frontier labs, TheStreet reported.

Rivals who rarely agree on anything backed him almost immediately. Sam Altman posted that he agreed AI companies need to slow the pace of development. Elon Musk offered a three-word endorsement on social media. It’s a notable shift, given his history of publicly criticizing Anthropic.

Musk’s softer tone tracks a commercial relationship that became public in May. SpaceX’s S-1 filing revealed that Anthropic pays SpaceX $1.25 billion a month for the Colossus 1 data center in Memphis. The deal runs through May 2029, as TheStreet noted.

The pressure has also come from within the labs. A researcher who had previously worked at OpenAI resigned publicly around the same time, warning that people building frontier AI privately believe the technology could pose existential risks within the decade, according to PBS.

On Sept. 23, Altman and Amodei took that argument directly to the United Nations Security Council, urging world leaders to adopt shared AI safety standards before the technology’s pace outstrips the institutions meant to govern it.

Altman appeared in person. Amodei joined the video, CNBC reported. It was the first UN Security Council session focused specifically on frontier AI safety risks.

The timing of the safety push lines up with a wave of unusually blunt warnings from AI executives.LUDOVIC MARIN / Getty Images

Leadership candidates and skeptics

Sriram Krishnan advised the current presidential administration on AI. Arati Prabhakar ran President Biden’s science office. Both are on the CEO shortlist. The bipartisan casting is not accidental.

Former U.S. Secretary of State Condoleezza Rice and venture capitalist David Friedberg have been separately shortlisted for chair, Bank Info Security reported.

The FINRA comparison has a catch. FINRA can actually punish brokers. SAFA, without government registration, probably cannot. It would set standards but may not necessarily enforce them.

The industry is not united behind this. Meta, xAI, and Nvidia pushed back publicly at Dreamforce on Sept. 15. SAFA is a deal among three labs, not a consensus across the whole field.

The criticism writes itself. The biggest labs write the rules. The biggest labs get audited against those rules. Smaller competitors and open-source developers face a bar they did not help set and cannot easily clear, CNBC reported.

What it means for investors

Nothing has launched. No charter. No confirmed leader. Investors should read SAFA as a signal about where regulation is headed, not proof that it has arrived.

If it does launch and actually works, it takes some big risks off the table. The messy patchwork of state-by-state AI rules, or the sudden federal crackdown nobody sees coming.

A voluntary framework the biggest labs helped design themselves is, almost by definition, one they can live with.

The real question is simpler than it sounds.

Can a body funded by the companies it polices ever actually police them? Or does it just give everyone cover to keep doing what they were already doing?

Related: Michael Burry sends stark warning on AI hyperscalers

Taylor Sheridan is the backbone of Paramount+ and it may be hard to keep track of just how many shows he’s written or produced. Here’s the list from Landman to Lioness.

A new bill calling for lowering Social Security’s full retirement age from 67 to 60 for workers in physically demanding jobs could put additional strain on the trust fund that backs the system and create a two-tiered system among workers, retirement experts said.

The Vanguard S&P 500 exchange-traded fund (ETF) held roughly $1.76 trillion in total net assets as of Aug. 31, 2026, and anchors retirement portfolios nationwide, Vanguard reported.

Most holders treat it as a broadly diversified position across 500 companies, with an expense ratio of 0.03% that makes the cost nearly invisible.

A $500 monthly contribution since VOO’s September 2010 launch would have grown to roughly $330,000, powered by VOO’s 825% price return over the same window.

That price appreciation has been fueled almost entirely by mega-cap technology names such as Nvidia, Apple, and Microsoft, 24/7 Wall St reported.

CFA Institute, VanEck, and retirement researchers at the 2026 Morningstar Investment Conference each flagged those concentration risks separately this year.

Experts have raised similar alarms about how AI-heavy holdings are reshaping 401(k) portfolios across the broader retirement landscape, not just inside VOO. 

Their shared concern is that the composition powering VOO’s returns may now pose a direct threat to the holders who depend on the fund for retirement income.

How a small group of AI-linked stocks reshaped VOO’s composition

Information technology (IT) accounted for about 36.6% of VOO as of Aug. 31, 2026, up from below 20% when the ETF launched in 2010, Vanguard reported. 

Nvidia’s market capitalization stood at roughly $5.37 trillion as of Sept. 18, 2026, according to StockAnalysis.com, after the chipmaker posted $96.2 billion in second-quarter fiscal 2027 revenue, a 106% year-over-year increase, NVIDIA reported in its Aug. 26, 2026, earnings release.

The top 10 holdings in the index now control close to 40% of its total weight, up from approximately 18% a decade ago. John Patrick Lee, senior product manager at VanEck, documented that shift in the firm’s July 2026 concentration analysis.

More VOO:

Vanguard’s VOO crossed $1 trillion as AI mega-cap dominance widened

S&P 500 concentration is creating demand for Vanguard ETF alternatives

VOO’s 0.03% fee masks a deeper technology concentration problem

A passive S&P 500 allocation now functions as an unintentional active sector bet, regardless of whether the investor intended that exposure, Lee concluded.

The mega-cap stocks at the top of the index drive both the gains in rallies and the bulk of the losses during sell-offs.

That structural shift raises a question about forward performance that CFA Institute researchers tried to answer with six decades of rolling data. Their findings run counter to the expectation that strong trailing returns predict continued strength.

CFA Institute research links VOO-style concentration to weaker forward returns

Portfolios with the strongest performance over the previous 15 years tended to have the lowest estimated future returns, according to a February 2026 CFA Institute Enterprising Investor analysis.

Bill Pauley, founder of Southernmost Advisors, co-authored the research with three colleagues.   

Growth stocks in the top 500 posted a trailing 15-year return of 17.8%, but their estimated forward return drops to 6.1%, the analysis found.

Cap-weighted portfolios missed the 8% annualized return target embedded in most retirement plans in nearly a third of 15-year rolling windows.

Michael Finke, professor of wealth management at the American College of Financial Services, cautioned at the 2026 Morningstar Investment Conference that extreme valuations leave new retirees exposed to returns falling short of their income plans.

I think the risk has never been higher that retirees are not going to earn the returns that they hope to get to be able to generate the amount of income that they expect to receive from their investments.

The CFA Institute data suggests the next 15-year stretch could resemble the historical norm for concentrated growth strategies more than the fund’s recent run.

That forward-return compression poses the greatest danger to retirees navigating sequence-of-returns risk.

CFA Institute research warns that VOO-style concentration and elevated valuations could weaken future returns and increase retirement sequence-of-returns risk.baranozdemir / Getty Images

Sequence-of-returns risk sharpens inside a concentrated fund

Dollar-cost averaging helps savers by turning each downturn into an opportunity to buy more shares at lower prices.

Investors who contributed steadily throughout the 2000-to-2015 window turned a 4% market return into an effective 8% gain through that dynamic, the CFA Institute analysis found.

Retirees pulling monthly income during that same window, which included two drawdowns exceeding 50%, faced the opposite outcome.

A spender withdrawing 8% of the portfolio annually, adjusted for inflation, lost roughly half the starting balance and earned an effective annual return of negative 4%, the researchers found.

Cap-weighted portfolios failed to sustain withdrawals of at least 6% of the starting balance in 17% of rolling 15-year periods since 1965, the CFA Institute analysis showed.

The 17% failure rate reflects six decades of cap-weighted history, most of which featured far less top-heavy indexes than VOO holds today. 

A drawdown concentrated in the fund’s dominant holdings would amplify that damage beyond what historical periods measured, and retirees holding stock-heavy portfolios face that amplified exposure without the runway to wait for a recovery.

What the 8.3% forward return estimate means for VOO withdrawal plans

The same CFA Institute analysis projects a cap-weighted forward return of 8.3% over the next 15 years, below the style’s 10.5% historical median.

Holders who built withdrawal projections around VOO’s recent performance are working from a return assumption that sits well above what the data forecasts, Pauley and his co-authors concluded.

Morningstar’s 2026 State of Retirement Income report set the baseline safe withdrawal rate at 3.9% for new retirees planning for a 30-year horizon, equivalent to roughly $39,000 per year from a $1 million portfolio. 

At the CFA Institute’s 8.3% forward projection, that 3.9% withdrawal would consume nearly half the portfolio’s annual return, leaving little room to compound for inflation adjustments or unexpected expenses over a three-decade retirement.

Related: Vanguard’s VOO faces something it never has before