September historically presents challenges for the U.S. stock market, often characterized by seasonal weakness and increased volatility. Data from Dow Jones Market Data reveals that the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have historically underperformed in September.
Adam Turnquist, chief technical strategist at LPL Financial, explained that the market typically transitions from the summer’s low trading volume and reduced volatility to a period often marked by instability. He cautioned, however, that these seasonal trends must be considered within the larger economic context.
Turnquist pointed out that strong August performance often mitigates September’s typical weakness. August 2025 saw significant gains across major indices, including the Dow Jones Industrial Average, Nasdaq Composite, S&P 500, and Russell 2000. This positive momentum could influence September’s performance.
He further elaborated on the significance of the S&P 500‘s position relative to its 200-day moving average. When the index is above this average entering September, historical data suggests a higher probability of positive returns for the month. Currently, the S&P 500 sits comfortably above its 200-day moving average.
While acknowledging September’s potential for weakness, Turnquist emphasized that broader macroeconomic factors, such as the overall health of the U.S. economy and corporate performance, will ultimately determine stock market performance.
Upcoming key events include the August employment report and the Federal Reserve‘s policy meeting. The employment report will offer insights into the labor market’s trajectory, while the Fed meeting is expected to include a potential interest rate cut.
Turnquist highlighted the uncertainty surrounding the nature of the potential rate cut – whether it will be perceived as dovish or hawkish. He also suggested that the market may be somewhat overbought in the short term, as positive economic expectations might already be reflected in prices.
Despite the generally calm August 2025 market, as evidenced by the low levels of the Cboe Volatility Index (VIX), Turnquist cautioned that this could precede increased volatility. He noted a historical tendency for the VIX to rise in the fall.
The recent release of the July personal consumption expenditures index, showing persistent inflationary pressures, contributed to Friday’s market decline. This further underscores the complexities and uncertainties facing the market as September begins.
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