What happened
Data stretching back to 1928 shows the S&P 500 has declined in September 56% of the time, with an average drop of more than 1%. The Dow Jones Industrial Average has fared no better since 1897, posting an average September loss of 1.1% and closing higher in only 42.2% of those months.
Analysts point to several forces behind the seasonal weakness: traders return from summer holidays more sensitive to news, portfolio managers often clear positions after Labor Day, September brings a quiet period ahead of third-quarter earnings, and macro variables such as inflation and Federal Reserve policy come back to the fore.
Despite the historical pattern, the market currently sits in a relatively stronger position. The S&P 500 finished August at 7,686.14, far above its 200-day moving average of 7,122.92, a technical condition that has historically coincided with a much narrower September downside risk.
Why it matters
The so-called September curse is a statistically real seasonal bias, but it is not an ironclad rule. Past Septembers with the worst losses usually occurred when the market was already turbulent or weak, so investors should treat the historical data as a probability reference rather than a directive.
For those willing to look past index-level anxiety, sector-level trends may offer opportunity. One analysis suggests that pullbacks during the unfavorable seasonal window could be long-term buying opportunities, with materials and technology among the sectors worth watching.
Key facts
Since 1928, the S&P 500 has fallen in September 56% of the time, with an average decline exceeding 1%.
Since 1897, the Dow's average September decline is 1.1%, and it has risen in only 42.2% of Septembers.
As of August 31, the S&P 500 closed at 7,686.14, above its 200-day moving average of 7,122.92.
The S&P 500 recorded its best August since 2021, and gained over 12% for the year through August.
Fed Chair Warsh's Jackson Hole remarks raised market expectations of a rate increase from 35% to 60%, per the CME FedWatch tool.
What to watch next
The Federal Reserve's monetary policy decision scheduled for September 16 is a key variable traders are watching closely.
September will also bring a batch of important economic data, including manufacturing and services PMIs, the August CPI, and August employment figures.
Sector watchers will be monitoring materials and technology ETFs, whose historical September-to-October dip has often been followed by year-end gains.