Why Traders Fear September: 10 S&P 500 Stocks To Watch As Weak Seasonality Kicks In
While the S&P 500 keeps flirting with record highs, traders are bracing for a statistically rough September, a month that's earned its bearish reputation over decades of consistent underperformance.
- VOO ETF is trading near record highs. Check the chart here.
Why September Spooks Wall Street
The data doesn't lie—September has historically been the weakest month of the year for U.S. equities.
The SPDR S&P 500 ETF Trust (NYSE:SPY) has averaged losses of 0.98% over the last 20 years, 0.96% over 30 years, and 1.04% over 40 years during September.
More recently, the index has only closed higher in one of the past five Septembers, delivering an average monthly drop of 1.4%. That's negative consistency no bull wants to see.
"Using the ‘you're only as good as your last at bat' analogy, the S&P 500 has a tough recent track record in September," Adam Turnquist, analyst at LPL Financial, said in an emailed note.
Paul Ciana, technical strategist at Bank of America, crunched the seasonal data and reached a similar conclusion:
September is reliably bad for the broader U.S. stock market.
After hitting a new all-time high in August, the S&P 500 fell in 61% of September cases, averaging a 0.81% loss. Since 1928, the S&P 500 has declined in September 56% of the time, with an average drop of 1.17%.
In first year of the U.S. presidential cycle, the loss rate rises to 58%, with an average drop of 1.62%.
Which Sectors Typically Struggle In September?
September doesn't treat all sectors equally. According to Bank of America, the real estate sector tends to take the biggest hit, averaging a 1.78% decline, with gains only 39% of the time. The second half of the month is typically worse than the first.
Even traditionally resilient sectors like technology, financials, and discretionary tend to underperform, with discretionary in particular flipping from strength to weakness mid-month.
How Do The Magnificent Seven Perform In September?
Mixed results tell the story for the market’s elite tech giants. Here's their average September performance over the past 20 years:
| Stock | Avg. Return | Win Rate | Worst Sept. | Best Sept. |
|---|---|---|---|---|
| Nvidia Corp. (NASDAQ:NVDA) | +0.87% | 65% | -19.58% (2022) | +25.28% (2010) |
| Microsoft Corp. (NASDAQ:MSFT) | -0.96% | 50% | -10.93% (2022) | +6.42% (2006) |
| Apple Inc. (NASDAQ:AAPL) | -0.17% | 45% | -32.96% (2008) | +16.72% (2010) |
| Amazon.com Inc. (NASDAQ:AMZN) | +2.12% | 50% | -10.86% (2022) | +25.82% (2010) |
| Meta Platforms Inc. (NASDAQ:META) | +0.9% | 54% | -16.72% (2022) | +21.64% (2013) |
| Alphabet Inc. (NASDAQ:GOOGL) | +0.93% | 60% | -13.55% (2008) | +10.65% (2005) |
| Tesla Inc. (NASDAQ:TSLA) | +0.24% | 40% | -13.91% (2020) | +22.19% (2024) |
The September Sinkhole: 10 S&P 500 Laggards To Watch
A number of S&P 500 components have repeatedly delivered negative returns during the month, some with near-unbroken streaks of September losses. Here’s a look at 10 of the worst historical performers based on two decades of data.
- American International Group Inc. (NYSE:AIG)
- Average September return: -4.52%
- Win rate: 50%
- Worst September: -84.5% (2008)
- AIG stands out with the steepest average loss in the group, with its 2008 collapse during the financial crisis still weighing heavily on its long-term September performance.
- DexCom Inc. (NASDAQ:DXCM)
- Average September return: -3.89%
- Win rate: 30%
- Worst September: -34.43% (2016)
- DexCom has closed the month in negative territory in 10 of the past 11 years, making it one of the most consistently weak performers.
- The Mosaic Co. (NYSE:MOS)
- Average return: -3.72%
- Win rate: 45%
- Worst September: -36.28% (2008)
- Mosaic's September performance has worsened recently, closing lower every year since 2022.
- Morgan Stanley (NYSE:MS)
- Average return: -2.73%
- Win rate: 55%
- Worst September: -43.67% (2008)
- Morgan Stanley has been under pressure in most recent Septembers, closing the month with losses in 4 of the last 5 years.
- Old Dominion Freight Line Inc. (NASDAQ:ODFL)
- Average return: -2.42%
- Win rate: 45%
- Worst September: -16.77% (2007)
- Negative in 4 of the last 5 years. Old Dominion has repeatedly ended September in the red, with a clear pattern of recent underperformance.
- Newmont Corp. (NYSE:NEM)
- Average return: -1.93%
- Win rate: 45%
- Worst September: -16.59% (2007)
- Newmont's results show a persistent struggle during September, with only three green closes over the past 12 years.
- Schlumberger Ltd. (NYSE:SLB)
- Average return: -1.66%
- Win rate: 40%
- Worst September: -23.54% (2011)
- Negative in 4 of the last 5 years
- UnitedHealth Group Inc. (NYSE:UNH)
- Average return: -1.40%
- Win rate: 30%
- Worst September: -16.62% (2008)
- Negative in 7 of the last 8 years.
- Deere & Co. (NYSE:DE)
- Average return: -1.39%
- Win rate: 50%
- Worst September: -29.86% (2008)
- Adobe Inc. (NASDAQ:ADBE)
- Average return: -1.37%
- Win rate: 45%
- Worst September: -26.31% (2022)
- Adobe has not posted a positive September since 2018, making it one of the most consistent September laggards.
Read now: