September is historically the worst month for stocks.
Looking back to 1945, the S&P 500 has declined more than half the time in September, according to CFRA, with an average return of -0.73%.
But before you get caught up in seasonal market trends, September might not be as bad as history predicts.
“When you’re up over 10% for the year going into the normally troublesome month of September, it doesn’t do as poorly,” Carson Group chief market strategist Ryan Detrick told Yahoo Finance.
So what could surprise investors and be a positive market catalyst? Excitement around AI, cash on the sidelines, and Apple’s (AAPL) rumored brand-new iPhone may be enough to buck September’s usual downward trend.
AI hype fuels gains
AI excitement fueled the market’s rally this year, with shares of AI-related stocks including Nvidia (NVDA), Meta (META), and Microsoft (MSFT) among the market’s best performers.
And it’s not just tech players benefiting from the hype. Companies across industries have jumped on the bandwagon by mentioning AI on earnings calls, highlighting how artificial intelligence can transform sectors including travel, healthcare, and manufacturing.
And come September, AI could offer a boost to investor sentiment, thanks to upcoming announcements from Microsoft, Meta, and Salesforce (CRM). Microsoft and Meta are both set to hold events in September to show off their latest innovations in artificial intelligence, while Salesforce is expected to further tout AI efforts at its annual Dreamforce conference.
“AI is probably not priced in,” Spouting Rock Asset Management chief strategist Rhys Williams told Yahoo Finance about the opportunity to invest in artificial intelligence. “The AI story is terrific right now. … We’re still in the early innings.”
Artificial intelligence will likely be a theme at Goldman Sachs’ Communacopia & Technology Conference in September too, where leaders across telecoms, media, and technology could give insight on various AI investments.
Investors holding cash
More investors are holding cash or investing in cash-related…