September has always been one of my favorite months. The air starts to cool, football returns, and routines feel a little more grounded after the summer rush. But for investors, September carries a very different reputation. Historically, it’s the market’s most difficult month, with the S&P 500 posting more declines in September than any other time of year. That contrast—the optimism I feel personally versus the wariness markets tend to show—makes September a fascinating moment to step back and really look at the bigger picture.
For nearly a century, September has been the S&P 500’s weakest month. Since 1928, the index has averaged a decline of just over one percent and has finished lower more than half the time—worse than any other month of the year. The pattern holds even when the window is narrowed: over the last fifty years, September’s average return remains slightly negative, and over the past twenty-five years the decline has deepened to nearly one and a half percent. These numbers don’t mean the market will fall every September, but reminds investors to brace for volatility when autumn arrives.
The bond market has added another wrinkle. Long-term Treasury yields have surged, with the 30-year yield briefly approaching five percent. Rising yields push bond prices lower, and the effect is most severe for long maturities. That has pressured long-term treasuries, investment-grade corporate bonds, and interest-rate sensitive equity sectors like real estate and utilities. At the same time, higher yields also improve the forward return potential of bonds. For the first time in years, investors can lock in income streams that are genuinely competitive, though doing so means tolerating near-term price swings.
The growth story is more nuanced than headlines suggest. The government’s second estimate for second-quarter GDP showed a 3.3 percent annualized increase, a sharp rebound from the small contraction in the first quarter. Yet much of the gain came from a decline in imports, which mathematically boosts GDP without signaling stronger domestic momentum. When trade distortions are stripped away, private domestic demand looks closer to two percent growth. Consumer spending has remained steady, and business investment has improved modestly, particularly in technology, but the overall picture is one of resilience rather than runaway expansion.
Corporate profits are also a piece of the story. U.S. companies rebounded strongly in the second quarter, with profits rising by more than $65 billion after a sharp decline earlier in the year. On a year-over-year basis, earnings for S&P 500 firms climbed by roughly 13 percent. Much of this improvement was fueled by cost-cutting, workforce reductions, productivity gains, price increases, and share buybacks. Many companies have managed to grow earnings per share even as revenue growth has slowed. Beneath that strength, however, lies a more complicated reality. Consumer sentiment has softened, spending on discretionary items is weakening, and several large firms—including retailers, automakers, and airlines—have scaled back or withdrawn their 2025 guidance in response to tariff uncertainty and slowing demand. The gap between resilient profits and more cautious consumer behavior could become a key risk for markets if it persists.
Taken together, these forces suggest a market environment that requires balance. September’s historical weakness warns against complacency. Rising Treasury yields highlight the need to manage duration risk carefully, even as they create opportunities for long-term income. GDP points to steady, not surging, growth. And corporate profits, while currently strong, may face pressure if consumers pull back further. For investors, the most prudent course may be to emphasize quality companies with durable balance sheets, maintain a thoughtful approach to bond maturities, and keep some flexibility in reserve to navigate what has historically been the market’s choppiest month.
So while the calendar might flash warning signs for markets, I take a different perspective. Just as I look forward to the first kickoff under the Friday night lights or the crisp mornings that signal fall is near, investors can view September as a time to reset. History shows us that markets stumble here, but the story doesn’t end in September—it’s just another chapter. With profits holding up, yields reshaping the bond market, and growth steadying, the bigger picture is more important than any one month. In the end, just like football season, investing is a long game.
Have a blessed week!
Joe Shearrer
Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly.
The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.
Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.