The Stock Market Is on Pace to End Its September Losing Streak -- Barrons.com

By Angela Palumbo

The stock market is ready to end what is usually a difficult month in the green, potentially breaking a four-year streak of September losses for all three of the major stock indexes.

September is historically the worst month for the stock market. On average, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite drop 1.1%, 1.2%, and 1%, respectively, in September, according to Dow Jones Market Data. Each of the indexes lost ground during September every one of the four years through 2023.

At the start of the month, it looked like history was ready to repeat itself. In the first five trading days of September, the Dow was off 1.8%, the S&P 500 was down 3.1%, and the Nasdaq Composite tumbled 4.7%.

There were a few reasons for the decline other than the typical drop during the month. The employment report for August showed that the U.S. added fewer jobs than economists expected, which added to concern among investors that the economy was slowing too much. Earnings from some big technology companies also didn't excite Wall Street to end the summer, giving investors a reason to move money out of the megacap stocks that have driven much of this year's rally.

Now, things seem to be turning around. On Thursday, investors were celebrating Wednesday's decision by the Federal Reserve to cut interest rates by half a percentage point. As of midday, the Dow, S&P 500, and Nasdaq Composite were up 1.2%, 1%, and 1.4% respectively this month.

The Dow and S&P 500 were on pace for their best September since 2019, while the Nasdaq Composite was poised for its best September since 2016.

"Markets exist, for the near term, in an environment of 1) Easing Fed, 2) Slowing but 'OK' economic data, 3) Generally solid earnings and 4) Positive momentum. As such, a continued grind higher in stocks over the near term shouldn't be a surprise," Tom Essaye, founder of the Sevens Report, wrote on Thursday.

A lot can happen in the last 11 days of September. But for now, investors can breathe a sigh of relief.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 19, 2024 14:40 ET (18:40 GMT)

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