3 Market Factors to Consider as September Begins

• The SPX at 7,700 represents a 10% gain above the late-January 2026 high, triggering potential profit-taking similar to previous behavior around the 7,530 level (10% above 2025 close)
• September historically shows mixed results during midterm election years: September 2022 saw a 9.3% decline while September 2010 gained 8.8%
• Following Jackson Hole symposiums, there is a 16% chance of a 3%+ absolute move within one week (double the normal 7-8% probability), though major moves remain less than a coin flip

Market Summary: September Trading Considerations

Current Market Position:

The S&P 500 Index stands at 7,711.76 as of August 31, 2026, hovering near the 7,700 level after showing minimal follow-through from an August 4 breakout. Traders who entered positions at that breakout (7,736) have seen no gains, with the index potentially entering another holding pattern.

Key Technical Levels:

• August close needs above 7,489.72 (July close) for a monthly win
• The 7,700 level represents 10% above the late-January 2026 high
• Previous resistance at 7,530 marked 10% above the 2025 close

Major Uncertainties Impacting Markets:

• U.S. deficit surpassing $40 trillion last week
• Rising longer-term interest rates correlating with deficit growth
• U.S.-Iran conflict driving higher oil prices
• Weakening dollar's potential inflationary impact
• AI infrastructure buildout affecting utility prices
• Upcoming midterm elections

September Historical Context:

Since 2000, September has been a 50/50 proposition for the S&P 500. Recent years show positive momentum (2024: +2%, 2025: +3.5%), though midterm election year precedent is mixed (2022: -9.3% vs. 2010: +8.8%).

Jackson Hole Symposium Impact:

New Fed Chair Kevin Warsh spoke Friday. Historical data shows muted reactions, with average weekly gains of just 0.4% following the gathering. However, probability of significant moves (3%+ absolute) doubles to one-in-six odds this week.

Market Dynamics:

Analyst Todd Salamone attributes range-bound trading to overweight fund managers lacking buying conviction while short-covering prevents meaningful pullbacks, creating a profit-taking mentality at all-time highs.