Calendar dates are not supposed to matter in efficient markets. Stock prices should reflect a company's cash flows, as well as sentiment toward macroeconomic variables such as interest rates. The fact that Labor Day is right around the corner shouldn't matter. Yet for nearly a century, one month has exhibited a noticeably different pattern from the rest of the year.
September is the only month in which the S&P 500 (SNPINDEX: ^GSPC) has posted a negative long-run average return, down roughly 1.1% between 1928 and 2025. While there is no single reason for September's historical weakness, much of the declines are attributed to portfolio managers returning from summer vacations and rebalancing their portfolios. This means liquidity that had thinned out during July and August has to absorb new selling pressure.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Investors should care because the September Effect is influential enough to manifest in even the most crowded growth trades. Let's explore what that could mean for artificial intelligence (AI) stocks.
One practical reason to notice patterns around September is concentration risk. When a handful of richly valued growth stocks dominate the S&P 500, a seasonally weak month can turn into a harsher de-risking event rather than a gentle period of digestion. That is the setting in which AI stocks now sit. More specifically, the largest AI companies, known as the "Magnificent Seven" -- Nvidia, Apple, Alphabet, Microsoft, Amazon, Tesla, and Meta Platforms -- now make up nearly 34% of the S&P 500's value.
#month #stocks #flashing
September is the only month in which the S&P 500 (SNPINDEX: ^GSPC) has posted a negative long-run average return, down roughly 1.1% between 1928 and 2025. While there is no single reason for September's historical weakness, much of the declines are attributed to portfolio managers returning from summer vacations and rebalancing their portfolios. This means liquidity that had thinned out during July and August has to absorb new selling pressure.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Investors should care because the September Effect is influential enough to manifest in even the most crowded growth trades. Let's explore what that could mean for artificial intelligence (AI) stocks.
One practical reason to notice patterns around September is concentration risk. When a handful of richly valued growth stocks dominate the S&P 500, a seasonally weak month can turn into a harsher de-risking event rather than a gentle period of digestion. That is the setting in which AI stocks now sit. More specifically, the largest AI companies, known as the "Magnificent Seven" -- Nvidia, Apple, Alphabet, Microsoft, Amazon, Tesla, and Meta Platforms -- now make up nearly 34% of the S&P 500's value.
#month #stocks #flashing
10 days ago
