Ugh, here comes September. But what follows tends to be positive for investors.

ANTHONY SAGLIMBENE – CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL

WEEKLY MARKET PERSPECTIVES —  August 31, 2026

Ugh, here comes September. But what follows tends to be positive for investors.

On Tuesday, the calendar will flip to what has historically been one of the most difficult 30-day periods for stocks. September has produced the weakest month of performance for the S&P 500 Index on average, a pattern that has held consistently across nearly a century of data going back to 1928. Notably, the Index has averaged a small monthly loss in September, with roughly a coin-flip chance of finishing the month positive, according to Bloomberg data. In fact, no other month in the calendar has a negative S&P 500 long-run average return, making September a unique outlier versus the rest of the year.

Over the last 20 years, the S&P 500 has averaged a 0.5% decline in September. Yet the Index has risen in September during nine of the last 20 years, suggesting weakness during the month isn’t necessarily chronic. In fact, FactSet data shows that September weakness tends to be occasional, but when it hits, it can lead to sharp declines in stocks.

Case in point, the negative September average over the last 20 years traces to a handful of deep declines (e.g., 2008, 2011, and 2022), rather than a steady monthly bleed. And as is usually the case with such outliers, some event or fundamental driver in the market/economy is usually behind the decline. Thus, we believe such color can help change how an investor reads the month. It’s important to point out that September doesn’t typically drag down returns year after year, even though it gets a bad rap for being the month that produces a negative return on average. Instead, September has historically delivered the calendar's largest single-month drops when other market dynamics are going south, but roughly flat-to-positive outcomes when market and economic conditions are more normal. In our view, that makes September seasonality weakness a risk to be aware of in the context of other market dynamics, but not necessarily a month investors want to consistently avoid stocks.

These figures are shown for illustrative purposes only and are not guaranteed. An index is a statistical composite that is not managed. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.

That said, this is a midterm election year, and seasonal factors tend to shift. Historically, midterm years have, on average, produced a softer stretch for stocks in the four-year presidential cycle, even though second-term presidents tend to see better midterm-year performance than first-term presidents. Nevertheless, full-year S&P 500 returns during midterm years have averaged roughly half those of non-midterm years, with a lower share of positive years, according to Bloomberg. And September itself has run weaker in midterm election years than its already-negative norm, as seen in the chart below.

So, stocks tend to be weak in September and can be even weaker during midterm election years. But what about the rest of the year? Here’s where history tends to turn from red to green. For example, the S&P 500 has averaged a +2.5% gain in October during midterm years, well above its all-year average. The Index also tends to bottom in early October, after its more difficult September period, roughly a month before Election Day, according to Bloomberg. And for investors with excess cash to put to work, the soft patch in September and early October has historically marked a favorable entry point rather than an exit point, whether or not it's an election year.

Notably, the weaker early fall period (when it occurs) has historically given way to strength through the rest of the year, in midterm years and otherwise. Over the last 20 years, the S&P 500 has averaged a +3.7% return in October, November, and December, and +4.7% in the nine years when the S&P 500 was negative in September. Over that stretch, the Index has averaged a +2.1% return in November alone, one of the strongest months of the calendar.

That year-end tailwind runs even stronger in midterm years specifically. For example, the fourth quarter of midterm years and the first quarter of the following year rank among some of the strongest segments for the S&P 500 throughout the entire presidential cycle since 1944. Interestingly, the Index has averaged gains of roughly +6.0% and +7.0% in those two quarters, according to Bloomberg.

These figures are shown for illustrative purposes only and are not guaranteed. An index is a statistical composite that is not managed. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.

Of course, this year hasn’t necessarily gone as history might have scripted. The historical election setup assumes summer and early-fall weakness that builds fear and clears positioning before stocks turn higher later in the year. Instead, the S&P 500 reached its year-to-date high in early August, and while the Index has seen periods of weakness throughout the year, it's up +13.5% year-to-date, well ahead of the typical flat performance usually seen at this point in midterm years. Equity volatility has also held near multidecade lows, and investors have been much more focused on other items we routinely discuss in these pages versus the makeup of Congress. In fact, given that most have expected all year that the November election would produce divided government, investors have found it easier to look past the usual election anxiety. We’ll see if that remains the case as we move through September and October.

Bottom line: Importantly, seasonal weakness is not a reason to step away from stocks. September's soft patch has historically been a function of timing and fundamental drivers influencing stocks at the time. As we enter this September, we believe the fundamental backdrop for stocks and the economy is sound. Corporate earnings have continued to grow at impressive rates, and the U.S. economy has continued to expand. As long as those two drivers stay intact, we would look through any potential September/early October volatility rather than react to it. History also argues for staying the course. The seasonal setup from October through year-end and into the following spring ranks among the strongest stretches of the calendar in midterm years and beyond. Simply, we believe investors are better served staying invested through the seasonal chop than trying to time around it.

The week ahead:

• August nonfarm payrolls on Friday headline a busy data week, with July JOLTS, August ADP private payrolls, and August ISM manufacturing and services also on the calendar.
• The Federal Reserve releases its latest Beige Book on Wednesday afternoon, with limited Fedspeak from Barr and Waller ahead of the Fed's blackout period beginning September 5^th and before the September 16^th rate decision.
• Earnings continue with Broadcom, Palo Alto Networks, Dell Technologies, and Medtronic among the notable reporters.

These figures are shown for illustrative purposes only and are not guaranteed. They do not reflect taxes or investment/product fees or expenses, which would reduce the figures shown here. An index is a statistical composite that is not managed. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.