All summer, the S&P 500 climbed calmly on rising corporate profits, shrugged off bond-market jitters, and pushed tech giants to new highs. With the arrival of autumn, however, the equity market is saying farewell to that serenity. Ahead lies a phase driven less by earnings and more by macro — rates, inflation, and Fed decisions — and that usually means greater volatility.

Seasonal stock index dynamics

History is not on the bulls' side. The Dow Jones Industrial Average averaged a 1.1% decline in September, in data stretching back to the 19th century. The S&P 500 posts similar seasonal weakness and ends the month down in more than half of years since 1928. Wall Street warns against overplaying seasonality alone, but there are plenty of reasons to be cautious even without it.

The main catalyst is the Fed meeting on September 16, the outcome of which is foggier than ever. Chair Kevin Warsh's decision to stop pre-signaling has deprived investors of their usual guideposts, forcing traders to scrutinize every governor speech for hints about the central bank's next move. Adding to concern is the unruly bond market: Treasury yields climbed through the summer on the back of higher oil, rising US deficits and heavy corporate issuance from tech firms. The sell-off then went global, pushing yields to multi-year highs in Japan, Germany, and the UK.

S&P 500 and US business activity dynamics

Still, there is no sign of panic. The economy remains in good shape thanks to a strong labor market and an AI-driven investment boom. Big-cap profits keep rising. The Cboe VIX sits at its 2026 low, and tight credit spreads point to relative calm among bondholders. JP Morgan advises clients to buy S&P 500 dips, arguing that improving profit forecasts make equities cheaper on multiples during any pullbacks, while manufacturing activity in the US and eurozone sits near four-year highs.

Leadership can change, though. JP Morgan warns that US equities risk ceding leadership for the second year running to non-US stocks. The EuroStoxx 600 is on track for a fourth consecutive year of gains, even if it still trails the S&P 500. Will summer calm persist after September 16? Time will tell.

Technically, the daily chart shows that the S&P 500 is forming a narrowing wedge pattern. Breakout strategies along the wedge lines are relevant. A break above the resistance level of 7,755 would justify opening long positions, while a successful test and a break below the support level of 6,775 would be a sell signal for the broad index. Be mindful of false breakouts.