What does September usually have in retailer for markets?

Don’t you just love when the first day of the new month is a Monday? It somehow makes for a fresh, clean start for markets. Or at least it gives me that sort of feeling. As we embark on September trading and the final month of Q3, let’s take a look at some seasonal patterns that have typically shaped how the month has gone in years prior.

For one, we usually see stocks face one of their worst months of the year. That means investors will be familiar with the tune Wake Me Up When September Ends. This year though, everything will ride on Fed expectations and the upcoming FOMC meeting decision on 17 September.

In the past 20 years, September has in fact been the worst month for the S&P 500. But as mentioned, the drivers this time around might make for a different pathway. After four years of bad Septembers from 2020 to 2023, we also saw the seasonal streak snap last year with the index posting roughly 2% gains.

Circling back to this year, everything will ride on expectations going into the Fed decision first and foremost. And that begins with the US labour market report this Friday, as well as Fedspeak during the week before the FOMC blackout period starts this weekend.

After that, we’ll move on to focusing on the US CPI report on 11 September before the Fed meets on 17 September. As things stand, traders are pricing in ~90% odds of a 25 bps rate cut for this month with ~54 bps of rate cuts by year-end.

A key consideration will be the inflation numbers to see if there is any further evidence of tariffs passthrough on prices. So, keep an eye out for that.

Besides that, September also marks the worst month in the past 20 years for the Nasdaq as well as the MSCI World Index. As such, it typically isn’t a great month for stocks in general if you go by the standard playbook that is.

Besides that, September also isn’t really a good month for gold historically. The precious metal might be off to a hot start today but has typically run into trouble over the past two decades in the final month of Q3 trading.

It is the second worst month in terms of performance for gold in the past 20 years with prices having fallen in 8 of the past 10 September months.

The same drivers impacting stocks above will also be key for gold alongside the recent dispute on the legality of Trump’s tariffs. The precious metal had a funny 2024 where it bucked the September seasonal trend amid a hot streak that started since February, before also bucking the trend in December where it stopped seven straight years of gains in the final month of the year.

With gold being up in seven of the last eight months, are we also due a similar story in 2025?

Lastly, let’s take a look at oil to see how the September month typically shapes up for the commodity.

During most years, the tail end of summer and the start of fall hasn’t been too kind for oil prices. And that was the case last year as well. September is usually the middle of a bad stretch of months for oil that typically spans from August to October/November.

So, that will be something to keep in the back pocket just in case when taking any views on the oil market in the month ahead.