Key Points:
• Since 1998, the second half of September has consistently shown market weakness compared to the first half.
• The seasonal low typically appears around September 17 — this year coinciding with the upcoming Fed meeting.
• October often remains volatile, but markets historically rebound strongly toward November.

Since the late 1990s, September has stood out as one of the weakest months for U.S. equities. Data from S&P 500 futures between 1998 and 2021 reveals a recurring seasonal pattern: stability in the first half of the month, followed by a marked downturn beginning around September 17. This year, the date carries additional weight as it aligns precisely with the Federal Reserve’s upcoming rate decision.

September’s Historical Weakness
Historically, the S&P 500 maintains relative stability from August through mid-September. However, from September 17 onward, the index tends to enter a sharp seasonal decline lasting into October. This phenomenon is visible in long-term charts built from more than two decades of market data.

October is often characterized by volatility, yet as the month progresses and earnings season approaches, the market typically stages a recovery that strengthens further into November.

Macro Context and the Fed’s Role
This year, the seasonal pattern intersects with a critical macroeconomic event: the Fed meeting on September 17. Current market expectations point to a 0.25 percentage point rate cut, with a possibility of a deeper 0.5 cut. Such a move could disrupt the historical seasonal weakness and provide markets with a positive catalyst.

Historically, monetary policy decisions have either amplified existing seasonal moves — deepening declines when expectations disappointed — or triggered sharp rallies when surprises favored investors. The consensus around easing financial conditions puts additional focus on this specific meeting.

The Role of Statistical Patterns
It is essential to recognize that seasonal trends represent historical statistics, not binding rules. Each year is influenced by unique factors, including monetary policy, macroeconomic data, and geopolitical developments.

Nonetheless, investors and portfolio managers often monitor September’s seasonal behavior as a guide for portfolio adjustments, hedging strategies, and tactical decisions. The rare overlap between this seasonal inflection point and a pivotal Fed decision underscores the need for close market monitoring.

As the second half of September approaches, the combination of a historical seasonal downtrend with a major macroeconomic event creates a critical testing ground for markets. Should the Fed deliver a rate cut, the seasonal weakness may reverse earlier than usual, setting the stage for an early rally. On the other hand, a conservative or disappointing policy move could reinforce the traditional autumn volatility. Either way, September represents a period of heightened importance for investors, where timing decisions may prove just as influential as the outcomes themselves.

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