After a hot start to the year, the US stock market experienced a decline in August. History suggests that investors may also struggle to establish themselves in September, and analysts warn: prepare for "bad results"

After a hot start to the year, the US stock market experienced a decline in August. Market history suggests that investors may also struggle to establish themselves in September.

Sam Stovall, Chief Investment Strategist at CFRA, stated that historically, the monthly average return on the S&P 500 Index in September was -0.73%. Since 1945, the monthly average return in September has been considered the worst.

Data shows that since 1945, the probability of the S&P 500 Index closing up in September is less than 50%, while the NASDAQ Index's average worst performing month since 1971 is also September. On Monday, Stovall wrote in a report, "Due to the heavy losses suffered by US stocks in September, we remind investors to be prepared for disappointing results in the S&P 500 and Nasdaq indices in the coming month.

In early August, Ryan Detric, Chief Market Strategist at Carson Group, pointed out that generally, since the US stock market entered August, the better the situation this year, the worse the performance of the US stock market in the last month of the summer. But Detric also believes that some of the weakness in September is' reasonable '. He stated on Monday:

We won't collapse in September, some fluctuating seasonal setbacks are normal. When you consider the incredible rise of the US stock market in the first half of this year, a little pullback, especially around some artificial intelligence companies, is quite healthy

Last week, the "AI King" NVIDIA released its highly anticipated financial report, sparking enthusiasm for investing in artificial intelligence for businesses, and the US stock market rose accordingly. But due to more hawkish comments from Federal Reserve officials suppressing the stock market, this rally only lasted for an hour.

Federal Reserve Chairman Powell said in his speech at the annual meeting of the Jackson Hole Central Bank last Friday that the Federal Reserve is "prepared to further raise interest rates". After his above remarks, the market's bet on the Federal Reserve raising interest rates again increased.

According to the Federal Reserve observation tool of Chishang Exchange, the market currently expects a nearly 20% probability of the Federal Reserve raising interest rates at its September meeting and a 51% probability of raising interest rates at its November meeting. Prior to the Jackson Hole Central Bank's annual meeting, the market expected a 38% chance of the Federal Reserve raising interest rates before the end of the November meeting. Stovall told reporters that "the uncertainty surrounding the September meeting of the Federal Reserve may cause the market to stagnate.

However, the September pullback does not necessarily mean that US stocks will experience a decline before the end of 2023. Just as Stovall emphasized that the Fed's September interest rate meeting was a turning point in the market, Detrick believes that the Fed has ended raising interest rates and the economy will remain resilient, both of which are key factors for the US stock market to remain bullish for the rest of this year. Detrick said:

From a historical perspective, the US stock market performed strongly in the fourth quarter, possibly driven by a resilient economy. We have not seen an economic recession, and once we pass the seasonal period, we expect the US stock market to experience quite strong growth in the fourth quarter. Before all the dust settles, the US stock market will hit a new high