We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
There’s no getting around it: September can be rocky.
The major indices were met with a September swoon on the first trading day of the month. Semiconductor stocks in particular were hit hard, as market participants continue to rotate out of technology and into rate-sensitive names ahead of the Fed’s upcoming policy meeting.
The rotation has put big tech in a somewhat precarious position as evidenced by the XLK ETF (XLK - Free Report) , which seeks to provide an effective representation of the technology sector of the S&P 500:
Image Source: StockCharts
Notice that XLK is showing a potential head-and-shoulders pattern, along with a negative divergence illustrated via the relative strength index (RSI). Of course, these bearish patterns can fail, which would be the case if the ETF breaks above its August highs in convincing fashion.
Recurring Seasonal Trends
The stock market tends to display seasonal propensities, whereby certain months of the year have historically outperformed relative to others. For example, we know that a positive tendency is usually exhibited around the holidays, particularly during the November-December stretch.
The month of September is widely known as the weakest month of the year. In terms of S&P 500 returns dating back to 1925, it’s the only month that has been net negative over time. The fact remains that September has been positive less often relative to any other calendar month.
We all know that September is the worst month of the year from a historical perspective. In fact, since 1950, returns during the month rank dead last (12/12), averaging about a -0.7% loss. This tends to hold true during post-election years (like the one we’re in) as well.
To make matters worse, when the S&P 500 has gained at least 1% in August with at least 5 all-time highs (like we just saw), the month of September has never been higher (lower 8 times out of 8 dating back to 1950).
October is also known for its volatile swings. Of course, seasonal patterns are not a sure thing.
Are you expecting a big drawdown in September? Not so fast – here’s what most investors usually miss.
September Is Actually Green More Often Than Not
Over the past century, the month of September has actually been positive around 55% of the time. Yes, this is less often than the average month, but it’s still better than flipping a coin. In other words, it’s the big (and relatively rare) monthly historical losses that paint a gloomy picture for September.
If we take out just six of the worst September months dating back nearly a century, the so-called “worst month” actually flips to a positive return on average.
Let’s remember that this year is also a post-election year. While the negative tilt tends to hold true once September rolls around, we should be viewing any pullback as a buying opportunity, particularly given the fact that post-election years have been quite strong in recent times:
Image Source: Zacks Investment Research
There are plenty of bears out there expecting another sour result in September. But anything can happen in the financial markets, and with earnings continuing to show strength (along with a Fed ready to cut rates), we need to be prepared for better-than-expected outcomes during this misunderstood month. Just last year, the S&P 500 finished September up 2%.
Sector Rotation Sparks New Opportunities
While the broader tech sector looks to take a breather, other pockets of the market have been showing strength. The Zacks Financial – Miscellaneous Services industry group, which currently ranks in the top 21% out of approximately 250 industries, contains several leading stocks.
A top stock within this industry group is SoFi Technologies (SOFI - Free Report) . A provider of lending products and financial services, the stock is a Zacks Rank #2 (Buy). SOFI stock has rewarded investors this year with a nearly 60% return:
Image Source: StockCharts
SoFi Technologies has surpassed earnings estimates in each of the past four quarters, delivering an average earnings surprise of 45.8%. The company is experiencing positive earnings estimate revisions, which our research has shown to be the most powerful force impacting stock prices.
Analysts covering SOFI have increased their full-year EPS estimates by 14.81% in the past 60 days. The 2025 Zacks Consensus Estimate now stands at $0.31/share, reflecting a whopping 107% growth rate relative to the prior year.
Image Source: Zacks Investment Research
Final Thoughts
This week is another crucial one for markets, highlighted by Friday’s release of the August employment report.
Despite seasonal headwinds, the fact that we recently broke out to new all-time highs following a nasty correction earlier in the year is an undoubtedly bullish development. While it would be normal to experience some turbulence as we move into the fall, we should view a healthy pullback as a buying opportunity.
The recent sector rotation is presenting notable opportunities outside of the former leader in technology. Make sure to stay abreast of all that Zacks has to offer as we make our way deeper into September.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
September Swoon: Is a Big Sell-Off Imminent?
There’s no getting around it: September can be rocky.
The major indices were met with a September swoon on the first trading day of the month. Semiconductor stocks in particular were hit hard, as market participants continue to rotate out of technology and into rate-sensitive names ahead of the Fed’s upcoming policy meeting.
The rotation has put big tech in a somewhat precarious position as evidenced by the XLK ETF (XLK - Free Report) , which seeks to provide an effective representation of the technology sector of the S&P 500:
Image Source: StockCharts
Notice that XLK is showing a potential head-and-shoulders pattern, along with a negative divergence illustrated via the relative strength index (RSI). Of course, these bearish patterns can fail, which would be the case if the ETF breaks above its August highs in convincing fashion.
Recurring Seasonal Trends
The stock market tends to display seasonal propensities, whereby certain months of the year have historically outperformed relative to others. For example, we know that a positive tendency is usually exhibited around the holidays, particularly during the November-December stretch.
The month of September is widely known as the weakest month of the year. In terms of S&P 500 returns dating back to 1925, it’s the only month that has been net negative over time. The fact remains that September has been positive less often relative to any other calendar month.
We all know that September is the worst month of the year from a historical perspective. In fact, since 1950, returns during the month rank dead last (12/12), averaging about a -0.7% loss. This tends to hold true during post-election years (like the one we’re in) as well.
To make matters worse, when the S&P 500 has gained at least 1% in August with at least 5 all-time highs (like we just saw), the month of September has never been higher (lower 8 times out of 8 dating back to 1950).
October is also known for its volatile swings. Of course, seasonal patterns are not a sure thing.
Are you expecting a big drawdown in September? Not so fast – here’s what most investors usually miss.
September Is Actually Green More Often Than Not
Over the past century, the month of September has actually been positive around 55% of the time. Yes, this is less often than the average month, but it’s still better than flipping a coin. In other words, it’s the big (and relatively rare) monthly historical losses that paint a gloomy picture for September.
If we take out just six of the worst September months dating back nearly a century, the so-called “worst month” actually flips to a positive return on average.
Let’s remember that this year is also a post-election year. While the negative tilt tends to hold true once September rolls around, we should be viewing any pullback as a buying opportunity, particularly given the fact that post-election years have been quite strong in recent times:
Image Source: Zacks Investment Research
There are plenty of bears out there expecting another sour result in September. But anything can happen in the financial markets, and with earnings continuing to show strength (along with a Fed ready to cut rates), we need to be prepared for better-than-expected outcomes during this misunderstood month. Just last year, the S&P 500 finished September up 2%.
Sector Rotation Sparks New Opportunities
While the broader tech sector looks to take a breather, other pockets of the market have been showing strength. The Zacks Financial – Miscellaneous Services industry group, which currently ranks in the top 21% out of approximately 250 industries, contains several leading stocks.
A top stock within this industry group is SoFi Technologies (SOFI - Free Report) . A provider of lending products and financial services, the stock is a Zacks Rank #2 (Buy). SOFI stock has rewarded investors this year with a nearly 60% return:
Image Source: StockCharts
SoFi Technologies has surpassed earnings estimates in each of the past four quarters, delivering an average earnings surprise of 45.8%. The company is experiencing positive earnings estimate revisions, which our research has shown to be the most powerful force impacting stock prices.
Analysts covering SOFI have increased their full-year EPS estimates by 14.81% in the past 60 days. The 2025 Zacks Consensus Estimate now stands at $0.31/share, reflecting a whopping 107% growth rate relative to the prior year.
Image Source: Zacks Investment Research
Final Thoughts
This week is another crucial one for markets, highlighted by Friday’s release of the August employment report.
Despite seasonal headwinds, the fact that we recently broke out to new all-time highs following a nasty correction earlier in the year is an undoubtedly bullish development. While it would be normal to experience some turbulence as we move into the fall, we should view a healthy pullback as a buying opportunity.
The recent sector rotation is presenting notable opportunities outside of the former leader in technology. Make sure to stay abreast of all that Zacks has to offer as we make our way deeper into September.