To The Moon

September closed with one last twist: a down day for most of the market, except for tech, which managed to stay afloat while the rest of Wall Street sagged.

• $S&P 500(.SPX)$ : –0.25%

• Dow: –0.86% (–441 pts)

• $NASDAQ(.IXIC)$ : +0.24%

The S&P spent most of the session in positive territory thanks to softer‑than‑expected inflation data. August core PCE rose 0.2%, while headline PCE climbed 0.3%, both cooler than forecasts and enough to spark a morning rally.

But the momentum didn’t survive the close. The S&P slipped into the red, ending September down 0.5%, while the Dow logged a 4.3% monthly drop. The Nasdaq, powered by tech resilience, finished the month up 1.9%.

Yields Stay Hot, Markets Stay Nervous

Yields

The bond market continues to dominate the narrative. The 10‑year Treasury hovered near 5.3%, capping its largest quarterly gain since 1994.

September’s entire market tone has been shaped by this push‑and‑pull:

• Yields surging, tighter financial conditions

• Rate‑hike odds falling, relief for growth stocks

As of Wednesday, markets price a 63% chance the Fed holds rates steady on Oct. 28, up from a coin‑flip just 24 hours earlier. That shift helped tech finish the month in the green.

Sector Snapshot

• Hot Stock: $GEN DIGITAL INC(GEN)$ +5.6%

• Biggest Loser: Jabil –10%

• Best Sector: Information Technology +0.6%

• Worst Sector: Consumer Staples –1.7%

October Arrives and Historically the Market’s Sweet Spot

September lived up to its reputation as a troublemaker. Now comes October, which historically flips the script, especially in midterm election years.

Since 1950:

• October: +3% average return

• November: +2.7%

• December: +0.8%

• Q4 in midterm years: +6.6% average

• Q4 in non‑midterm years: +3.4%

Cautions against investing purely by calendar, but history is hard to ignore: Q4 tends to deliver.

Of course, when October goes bad, it goes really bad with 1929, 1932, 1937, 1987, 2008, none of which were midterm years.

Still, Deutsche Bank strategists remain constructive heading into year‑end. Their key catalyst: earnings.

The last two reporting seasons saw markets stuck in tight ranges before ripping +3% as results rolled in. For Q3, they expect ~30% earnings growth.

If earnings deliver and seasonal tailwinds kick in, the market could make a run at new highs before January.

On Deck Today

• Earnings: Accenture, McCormick, $Nike(NKE)$

• Macro:

  ISM Manufacturing PMI (Sept): expected 55

  Above 50 all year → continued expansion

  Only one >50 reading in the prior three years

October begins with momentum, now it’s up to earnings and yields to decide whether that momentum sticks…

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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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