By: Steve Bruce
The market’s historically boring stretch may be here.
September and early October have often been a reminder that markets don’t move higher in a straight line. Looking back at the S&P 500 since 1970, this part of the calendar is typically the softest stretch of the year — a period where the average return path tends to flatten, get choppy, or pull back.
That pattern shows up clearly on a cumulative seasonality chart: gains build through the first half of the year, lose momentum in late summer, then often resume as the calendar turns toward year-end.
What the data since 1970 actually shows
Seasonality is not a forecast. It is a base-rate tendency measured over decades.
Across more than five decades of S&P 500 data:
- September has frequently been the weakest calendar month, with a negative or near-zero average return and a hit rate close to a coin flip.
- Early October can remain choppy, even though October as a full month is not as consistently weak as its reputation suggests.
- November and December have historically done more of the heavy lifting, which is why the fourth quarter as a whole has tended to be one of the stronger three-month windows of the year.
The chart we published marks the current window with a simple “You Are Here.” That marker sits in the flatter, more uneven part of the average path — not at a crash point, and not at the start of the year-end lift.
Why this period keeps showing up
A few recurring, calendar-driven behaviors help explain the footprint:
- Thinner late-summer liquidity
- Mutual-fund and fiscal-year positioning
- Tax-related selling
- The gap between summer earnings and the next full reporting cycle
- Buyback blackout windows that often reopen later in the fall
None of those forces dominate every year. Together, they have been persistent enough to leave a visible mark on the average path since 1970.
What this is not
This is not a call that a correction is coming.
It is not a standalone timing signal.
It does not mean investors should sell simply because the calendar flipped to September.
Individual years ignore the historical pattern all the time. A strong September or a weak November is not unusual. Seasonality is one input among many — alongside trend, breadth, valuation, liquidity, and the macro regime.
After more than five decades of data, though, it is hard not to pay attention to the recurring rhythm.
How we use seasonality
At Bruce Wood Capital, seasonality is context, not a trigger.
We look at where we are in the calendar the same way we look at other long-horizon signals: as a base rate that can inform positioning, risk budget, and expectations — not as a reason to override the rest of the process.
Sometimes the most useful information is simply knowing which part of the year the market is in.
If the average path is any guide, this stretch has often been the pause before the market does more of its work later in the year. Whether 2026 follows that script is a separate question. The calendar only tells you where you are standing.
Disclaimer: This material is for informational purposes only and is not investment advice, a solicitation, or an offer to buy or sell any security. Past performance is not indicative of future results.
Steve Bruce, CMT is the Co-Founder and Chief Investment Officer of Bruce Wood Capital, where he focuses on systematic global macro strategies and long-horizon, data-driven research.
