US stocks logged their worst month of the year in September, ending their final trading day of the third quarter in the red.Â
September has been a very choppy month for stocks, as investors grappled with plenty of concerns. From inflation to slowing economic growth in China, America’s debt ceiling, and rising bond yields.
On Thursday, stocks opened higher but slipped later in the day before finishing the day sharply lower. The S&P 500 finished the month 4.8% lower, its biggest drop since COVID-19 fears erupted in March last year. The tech-heavy Nasdaq Composite fell 5.3%, while the Dow Jones Industrial Average shed 4.3%.
Worst month for the major indexes
September turned out to be the S&P 500 and the Nasdaq’s worst-performing month since the start of the pandemic. The Dow also recorded its worst month since last October.
Join our Trading Community for more signals!
While the Dow and the Nasdaq both ended in the red for the third quarter, the S&P managed to eke out a small 0.2% gain and remains almost 15% higher this year. For the Dow and the Nasdaq, September marked their first loss since the first quarter of 2020 when the COVID-19 pandemic first hit economies around the world.
Stocks witnessed a sell-off Tuesday following Federal Reserve Chairman Jerome Powell’s comments on inflation, hinting that high inflation could stay around for a while longer.
US Treasury bond yields jumped earlier in the week. On Thursday, the 10-year government bond edged slightly lower to yield 1.52% around the time the stock market closed.Â
September is historically the worst month of the year for stocks, while October is notorious for the market crashes in 1929, 1987, and 2008. Yet, the fourth quarter, which starts Friday, has produced the best S&P 500 returns since 1950.
That makes it hard to put too much stock in the calendar. What is clear, though, is that markets are trying to power through a growing list of headwinds. The result could be more volatility in the coming months.
