September Gains Buck Trend

Investing.com – The S&P 500 recorded gains in September, defying typical seasonal trends. A new analysis from Bank of America suggests a potential rally to 6,000 by year-end.

Key Insights

• When the SPX rises in September, stronger returns often follow. In October, the SPX has increased 67% of the time, averaging a return of 1.62%. In the fourth quarter (4Q), this figure rises to 79%, with average returns of 5.08%.

• September is usually the weakest month for the S&P 500; however, it gained 2.02%, boosting its year-to-date gain to 20.81%. This positions the index for a potentially strong fourth quarter.

• Historically, when the S&P 500 is up 15% to 25% year-to-date by the third quarter, the average fourth-quarter return is 4.40%. This could push the index between 5,930 and 6,185 by year-end.

• In a presidential election year, strong Q3 gains could indicate similar trends for Q4, where a positive return is observed 89% of the time.

Caution Advised

Despite optimism, analysts emphasize the need for the S&P 500 to maintain key support levels (5670-5650 and 5615) to sustain this upward trend. They warn of potential volatility and risks in the final quarter of the year.