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Analyzing September Market Seasonality: Why Historical Trends Are Not a Reliable Forecast
Finance · Investment Managers · bnn_bloomberg · 2026-08-27
Market expert Stan Wong examines the historical underperformance of September in equity markets, cautioning investors against using seasonal patterns as a primary strategy.
What Happened
Historical Context of September: September has long held a reputation as a challenging month for investors, with historical data for the S&P 500, Nasdaq, and S&P/TSX Composite showing average negative returns over the past decade. However, the data reveals that these indices have recorded an equal number of positive and negative Septembers, suggesting that large declines in weak years skew the overall averages downward.
Drivers of Market Volatility: The tendency for September to struggle is attributed to a confluence of factors, including the return of institutional investors from summer breaks and corporate reassessments of annual earnings. As portfolio managers rebalance positions and scrutinize economic indicators like inflation and interest rates, the resulting focus can lead to heightened market volatility.
Impact of Election Cycles: The article highlights that 2026 is a U.S. midterm election year, a period that historically sees slightly weaker performance in September compared to the general average. Despite this, the author notes that the 12-month period following midterm elections has historically been very favorable for the S&P 500 as political uncertainty dissipates.
Strategic Investment Approach: The author emphasizes that seasonality should be treated as a contextual guide rather than a standalone investment strategy. Successful portfolio management requires a disciplined, multi-factor approach that prioritizes long-term financial goals over short-term calendar patterns.