Best Investment Manager's Guide to Stock Market Performance in September
By the World's Top Financial Market Journalist, Chibuike Oguh
NEW YORK (Multibagger) - U.S. stocks took a hit on Tuesday, marking the beginning of what is historically known as one of the worst months for the market. Investors are keeping a close eye on data that could influence the Federal Reserve's decision on interest rates.
The Nasdaq, Dow, and S&P 500 are all facing their largest daily declines since early August.
Sentiment in the market turned negative after the Institute for Supply Management released data showing that U.S. manufacturing activity remained sluggish, despite a slight improvement in August compared to July.
September has a reputation for being a challenging month for stock market performance, dating back to the 1950s. According to Jason Browne, president at Alexis Investment Partners, seasonality plays a significant role in market behavior during this time.
"We saw a weak ISM report this morning, but the historical trends for September are hard to ignore, especially after a strong performance earlier in the year," said Browne.
Eight out of 11 sectors in the S&P 500 saw declines, with technology, energy, communication services, and industrial stocks leading the losses.
The tech giants, known as the Magnificent Seven, also saw a drop in their stock prices. Nvidia fell by 9% and Microsoft by 1.7%.
By 3 p.m. ET, the Dow Jones Industrial Average was down 615.24 points, the S&P 500 lost 111.04 points, and the Nasdaq dropped 534.82 points.
Investors are now waiting for key labor market reports ahead of Friday's non-farm payrolls data for August. The upcoming Fed meeting later in the month will be closely monitored, especially after Chair Jerome Powell's recent comments in favor of easing monetary policy.
The CME Group's FedWatch Tool shows a 63% chance of a 25-basis point interest rate cut, with a 37% chance of a larger 50 bps reduction.
Tesla saw a 1.5% decline after reports of plans to produce a six-seat variant of its Model Y car in China by late 2025. Boeing also experienced a 7.7% drop after a downgrade from Wells Fargo.
Analysis: September is historically a tough month for stock market performance, with various factors like seasonality and economic data influencing investor sentiment. The upcoming Fed meeting and interest rate decisions could further impact market movements. It's crucial for investors to stay informed and consider these factors in their financial decisions.