What Is the ‘September Slump’ In the Stock Market?
By: Anneken Tappe · September 10, 2024 · Reading Time: 2 minutes
September is typically a challenging month for the stock market. Stocks historically decline 1.2% on average in September, per data from the Wall Street Journal.
It’s early days, but so far, this month has been no exception. Stock prices fell sharply in the first week of September, on the back of weak jobs and manufacturing data.
The decline was also exacerbated by volatility and downturns in mega-cap stocks such as NVIDIA (NVDA). On September 6, the chip giant’s market value plunged by $280 billion. It was the largest single-day loss by any company in history, and a big reason the tech-heavy Nasdaq Composite fell 3.3% on the same day.
Market Macro Trends
It’s important to put the recent September Slump in context.
“More trading activity can lead to more volatility. Part of it is caused by repositioning after the action of the summer months, which tends to be quite positive. Other parts are caused by different factors each year, but the simple fact that more people are active in the market makes things a bit more jumpy,” wrote SoFi Head of Investment Strategy Liz Young Thomas in her column recently.
While stocks declined at the beginning of September, both the S&P 500 and Nasdaq Composite are up approximately 15% in 2024, year-to-date. This is more than their average 10% annual return. Additionally, certain sectors like consumer staples and utilities have fared even better than the overall market, per WSJ data.
Will the Slump Continue?
We don’t have a crystal ball, so we can’t tell how the stock market will perform and past results do not guarantee future returns. However, with a major shift in monetary policy, and a presidential election on the horizon, there is reason to expect some volatility ahead.
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