Summer stock market momentum ran out. What does history say about september.

The US stock market’s summer rally from year lows in June came to a halt in August, leaving major indexes with monthly losses as investors brace for the start of a traditionally unpleasant month for stock bulls.

Since 1950, September has been the worst-performing month of the year for the DJIA.
-0.88%And the
S&P 500 SPX,
-0.78%
and email 1000 RUI,
-0.77%
And worse for the Nasdaq Composite,
-0.56%
Since 1971 and the Russell 2000 RUT compact size,
-0.62%
Since 1979, Jeff Hirsch, Stock Trader’s Almanac calendar editor, has noted in Blog post.

But what happened in August? The first half of the month was all about momentum. After a bear market was confirmed in June with a drop of more than 20% from January 7. After a record 3 finish, the S&P 500 rebounded from its low on June 16. The rebound gained momentum in July and extended into August, liquidating a number of technical obstacles Which made market watchers think about whether or not a rally was about to happen More than a typical bear market rally.

But it seems that the 200-day moving average is so bridge too far. After closing at a nearly four-month high on August 3. At 16, the S&P 500 stopped at the long-term average.

On the macroeconomic side, tentative signs of inflation peaking generated thoughts on the policy pivot by the Federal Reserve, as officials paused and then began to roll back interest rate increases in 2023 credited with providing a rally in equities. Federal Reserve officials have backed away from that scenario, and last Friday Bank Chairman Jerome Powell sent a clear message that rates are likely to rise and stay high for longer even if it leads to economic pain.

So on Wednesday, the last trading day of the month, stocks suffered a fourth consecutive loss, leaving the S&P 500 down 4.2% for the month, the Dow down 4.1%, and the Nasdaq down 4.6% in August. The S&P 500 is down 17% year-to-date, the Dow is down 13.3% and the Nasdaq is down 24.5%.

deep dive: Here are the worst (and best) performing stocks for August and 2022

September often brought more monsoon headwinds in the years when stocks were low year-to-August, analysts at Bespoke Investment Group said in a note Wednesday, citing the performance of the S&P 500 going back to 1928.

“When the S&P was down year-to-date (YTD) through the end of August (as it is this year), the index had fallen on average by 3.4% in September, while September was flat when the index was high. YTD . . per month,” they wrote. “Throughout the remainder of the year, the index averaged a 1.2% loss when arriving in September with year-to-date losses and 3.3% gains when arriving in September above year-to-date. (See chart below).

Bespoke Investment Group

September’s weak market performance in the month shows “remarkable consistency,” MarketWatch’s Mark Hulbert wrote in in August. 23 columns. However, the problem for traders is that the cause – if there is one – remains a mystery, making bets based solely on the pattern questionable.

We see: Oil prices are a sign of their loanGesture of consecutive monthly loss in more than two years