SEPTEMBER, the worst month for the S&P 500?What trend for the S&P 500 index this September 2025? A highly anticipated September as the fundamental back-to-school issues are crucial for the year-end trend.
September is the worst month for the S&P 500 index in terms of seasonality, and investors fear a drop in the US stock market this September while fundamental challenges are not lacking (the FED on Wednesday, September 17) and the S&P 500 is as expensive as it was at the end of 2021 in terms of valuation. Is this bearish consensus a trap?
On the topic of the S&P 500 valuation, I invite you to reread the analysis we published on July 30 by clicking on the image below.
1. Is September really the worst month in terms of performance for the S&P 500 index?
YES! Yes, September is indeed the worst month in the history of the S&P 500 index in terms of average performance. The average performance of September is negative, and no other month of the year shows a negative performance for the S&P 500.
However, be very cautious with this type of statistics, as it is only an average, and still, 47% of the September months in S&P 500 history have recorded a positive performance.
The data source below is indicated at the bottom right of the table.
2. The final performance of September 2025 will be dictated by fundamentals, in particular the Fed’s monetary policy decision on Wednesday, September 17.
The Fed has not lowered the federal funds rate since the end of 2024, and the US stock market now needs an accommodative monetary shift to preserve its long-term bullish trend. In one of my articles last week, I examined the 3 possible scenarios for the federal funds rate by the end of the year as well as the stock market impact for equities, bonds, the US dollar, and Bitcoin.
The table below summarizes the 3 possible cases and the potential market impact; you can access all details by clicking on it.
It is Powell’s Fed monetary choice on Wednesday, September 17 that will determine the final September performance for the S&P 500 index. The next two figures likely to influence the Fed’s decision are the PCE inflation on Friday, August 29 and the NFP report on Friday, September 5.
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