Y&R Recap September 2: Billy Stuns Cane and Lily, Hands Them Chancellor

On the Wednesday, September 2, 2026, episode of The Young and the Restless, Sally's medical crisis leads Billy to make a major decision. Plus, Phyllis and Matt come to an understanding.

Sally's Just Fine

Billy gives Sally what she wants | Image: JPI

After doubling over in pain and calling an ambulance, it turned out that there was nothing wrong with Sally at all. At Crimson Lights, she reminded Billy that the doctor said what she felt was normal, but Sally knew she had to avoid stressors. She noted that the Chancellor situation wasn't helping matters.

Billy reminded Sally that she and his kids came first. He'd even drop the entire Chancellor matter until after the baby was born if that was what Sally had wanted. They didn't get much further in that conversation because Audra arrived to catch up with her friend.

After Billy left, Sally confided in Audra about her recent scare. It was just round ligament pain but it reminded Sally of what had happened with her other baby and she couldn't bear to go through something like that again. Audra also had a lot to lament. She had real feelings for Noah, but now he was off in Los Angeles with Sienna and she knew it was really over.

Sally tried to be encouraging to Audra, reminding her that she would find someone one day, so the subject went back to Sally. Audra hoped that Billy would remain true to his promise to drop the whole Chancellor matter until after the baby was born if that's what Sally really wanted.

At-Home Spa Day...With a Bombshell

Seeing how Lily was all about business, Cane wanted to change that and offered to give Lily a little at-home pampering. She was busy with work and didn't have a lot of time, but would make some for a quick massage. Things quickly grew intense, but a phone call from Mattie interrupted the moment.

Mattie even spoke to Cane, which was a big deal. He hoped this was the start of a forgiveness journey that Cane was willing to take. Lily thought that things would get better between Cane and his kids. They were in a good place now, so it was only a matter of time with Charlie and Mattie.

Then, things took quite a turn. Billy barrelled in, shocking the pair enjoying popcorn on the couch. He told them about Sally's scare and how it put things in perspective for him. Billy was ready to hand them Chancellor without a fight so that Sally and the baby would be okay.

Cane and Lily were stunned, but agreed to remain on guard cause something seemed suspicious. When Billy returned to Crimson Lights, he told Sally that he informed Cane and Lily that Chancellor was theirs. He didn't bother telling them that he meant only until the baby was born. Billy didn't want to give away his whole game, but he didn't know that Cane and Lily were already onto him.

Concerned Friends

Lauren and Michael discussed Phyllis | Image: JPI

At the GCAC, Michael and Lauren sat down to catch up on all things Phyllis. Lauren was worried about her friend spending time with Matt Clark. In fact, it seemed to be an obsession. She was even convinced that Victor had done something to Matt.

Michael understood why Phyllis would fall for a man who needed her. She just chose the wrong one. They wondered if she was trying to compensate for what had happened with Martin because Matt was clearly bad news. Michael even surmised that Phyllis could be performing a psychological experiment on Matt. That would make more sense than her having fallen for the madman.

Lauren had never seen Phyllis so enamoured with a man besides Nick. However, she worried that two people like Phyllis and Matt would eventually destroy one another.

Phyllis Finds Matt

Matt poured his heart out to Phyllis | Image: JPI

Phyllis rushed to Matt's seedy hotel as soon as he summoned her. She could see that he was a mess and wondered why he was in such a place. Matt explained that every horrific thing he had ever done was roaming around in his head driving him crazy and he had to get away to think.

Phyllis reached for some water and found the crumpled-up letter he had written before he called her. Phyllis read the letter and was stunned that Matt had been going through so much. Matt was semi-pleased to hear that Sharon believed he had wanted to change, but Matt was still a mess.

He told Phyllis that he had gone as far as visiting Patty in jail. She told him he was evil and that would always be with him, just like it is with Patty. Phyllis thought that was complete nonsense because Patty was crazy and Matt was not. At least Matt was showing remorse, something Patty couldn't do.

Matt felt too needy, but Phyllis seemed to need him to want him to need her. She promised to be there for him every step of the way. When Phyllis told Matt that she had gone after Victor, they both had a good laugh about it. Phyllis then asked Matt to come to her when he was in pain and not to some madwoman behind bars. She wanted to be the one to help him and even tore up that crumpled-up letter.

Phyllis told Matt there needed to be ground rules between them. If he was feeling this way, he couldn't run. "You need to reach out to me no matter where you are immediately," she said. "And don't reach out to someone who is in a prison for the criminally insane."

Matt and Phyllis ended up in bed together. She told Matt that she was going to make all of Genoa City see him as the good man he was trying to be. She was not going to let the world trash Matt, who couldn't even believe that he had found this woman.

Are you enjoying Matt and Phyllis? Is Billy being ridiculous? Let us know your thoughts in the comments.