The Data: September Really Is Weak
The numbers are stubborn: Average September return: -0.7% (worst of any month). Positive Septembers only about 45% of the time. Think 1987, 2001, 2008, 2011 — all had ugly Septembers.
Why? Tax-loss harvesting kicks in. Portfolio managers rebalance after summer runs. Lower volumes amplify moves, and bad news tends to cluster post-Labor Day.
This year, the weakness showed up right on cue. Yields ticked higher on another sticky inflation print, tariff headlines flared.
2025 Context: Seasonal Meets Structural
This isn't a normal September. The macro overlay is heavy: real inflation still running hot, tariff costs fully embedding, Fed's pause keeping real yields elevated.
But here's the counterweight: structural leaders are holding up remarkably well. AI infrastructure names — NVIDIA, Alphabet — continue grinding higher on unstoppable capex momentum.
September weakness is hitting the average stock hard, but market concentration in quality growth means the S&P isn't collapsing.
Trading Opportunity: Fade the Panic
- Dip-buy quality: Add to structural winners on weakness — AI leaders look mispriced on any pullback
- Avoid chasing cyclicals: Domestic industrials are volatile here despite reshoring tailwinds
- Hedge with hard assets: Inflation isn't going anywhere — metals remain the best ballast
September sell-offs often create attractive entries ahead of a Q4 rebound — historically, October–December is the strongest stretch.
Bottom Line
September weakness is real history, not myth — and it's playing out again in 2025 with extra macro spice. But it's rarely the end of the world, and often sets up strong year-end rallies.
This feels more like a buying opportunity than a regime shift. The bull market drivers — AI revolution, U.S. reindustrialization — are intact beneath the seasonal noise.