AUGUST WAS EASY. SEPTEMBER WON’T BE...
THE BULL MARKET JUST PASSED ANOTHER TEST
August is officially in the books. And despite a weak final session, the bulls have plenty to celebrate.
$S&P 500(.SPX)$ : +2.6%. $NASDAQ(.IXIC)$ : +3.9%. Dow: +1.3%
The S&P 500 and Nasdaq just had their best August since 2021. Even more impressive?
The Dow has now risen in 15 of the last 16 months, something not seen since 1936. That's not a normal market. That's a market that has repeatedly found buyers.
BUT NOW COMES SEPTEMBER
And history is about to get involved. Since 1928, September has historically been the S&P 500's worst month, averaging roughly: S&P 500: -1.1%. Dow: -1.1%. Nasdaq: -0.8%. Russell 2000: -0.5%
Of course, history doesn't predict the future. But September has something August didn't have: Catalysts.
And a lot of them.
THE FED IS BACK IN THE DRIVER'S SEAT
Following Kevin Warsh's Jackson Hole speech, markets are now pricing in roughly a 66% probability of a September rate hike. That's a major change from where expectations stood just weeks ago.
And investors won't have to wait long for new information.
This Friday: U.S. JOBS REPORT.
Then comes a barrage of inflation and economic data before the Fed's September 15–16 meeting.
One thing is certain: The market is going to have to earn its next leg higher.
THE AI TRADE STILL HAS SOMETHING TO PROVE
August's rally was partly fueled by investors buying the AI dip. $NVIDIA(NVDA)$ delivered. Semiconductors bounced
Software stocks came roaring back. $iShares Expanded Tech-Software Sector ETF(IGV)$
But September introduces a different question: Can AI earnings growth continue to justify increasingly demanding valuations while bond yields remain elevated?
That's where the next battle could take place.
AND THEN THERE'S APPLE
Another major transition begins. Tim Cook's CEO era is over. John Ternus takes over.
Cook's record is extraordinary:
$Apple(AAPL)$ shares gained roughly 2,296% during his tenure as CEO. But Ternus inherits a completely different Apple. The biggest question isn't whether Apple can sell another iPhone.
It's: CAN APPLE TURN AI INTO THE NEXT MASSIVE GROWTH ENGINE? The first major opportunity to answer that question comes on September 9.
NOW THE REAL QUESTION
What happens in September?
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A) NEW ALL-TIME HIGHS
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B) 5–10% CORRECTION
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C) SIDEWAYS / CHOPPY MARKET
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D) THE FED BREAKS THE RALLY
Yields
Drop A, B, C or D below.
Sound off in the comments.
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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