The most hated September on Wall Street has arrived!

Despite the strong performance of the US and European stock markets in August, investors are bracing for a historically "notorious" month. The recently concluded August provided investors with ample reasons to remain optimistic. The S&P 500 index reached a record high at the end of August, surpassing 6,500 points, while the Dow Jones also hit new highs, and the European Stoxx 600 index recorded its first consecutive two-month rise since February. However, historical data shows that the upcoming September is traditionally the worst-performing month for US and European stock markets, with the Dow, S&P, and Nasdaq typically recording their largest declines of the year during this month. Clear Divergence in European Markets: Bank Stocks Lead, Media Stocks Lag From an industry sector perspective, the market shows a clear divergence, especially in Europe. Driven by corporate earnings reports and global macro uncertainties, two-thirds of the third quarter has passed, with winners and losers clearly defined. The biggest winners are European banks. Thanks to positive earnings reports and ongoing merger rumors, European bank stocks reached their highest levels since the 2008 financial crisis in early August. Among them, Deutsche Bank performed particularly well, building on its strong performance in the first half of this year, with a year-to-date increase of over 100%. On the other hand, media stocks have been hit hard over the past two months, with declines exceeding 8%. The reason lies in market concerns about the potential impact of AI, putting pressure on the stock prices of several large European media companies. Among them, advertising group WPP performed the worst, with a 71% plunge in pre-tax profits in the first half of the year and a downward revision of its full-year performance guidance. Divergent Institutional Views: Optimists and Cautious Investors Coexist In the face of September and future market trends, institutional views have shown significant divergence. Optimists believe that the bull market in stocks will be maintained. Mark Haefele, Chief Investment Officer of UBS Global Wealth Management, stated in a report: "We believe the bull market in stocks will continue. In our baseline scenario, we expect a soft landing for the economy, robust corporate earnings, and lower interest rates to support the market over the next 12 months." Cautious investors, on the other hand, express concerns about the economic outlook. Gregory Daco, Chief Economist at EY-Parthenon, pointed out that the US economy "is showing resilience but is facing increasing pressures." He believes that although the US economy achieved a strong annualized growth rate of 3% in the second quarter of 2025, this strength is largely a "mirage," reflecting a significant decline in imports as companies accelerated purchases in response to previous tariffs. Looking ahead, Barclays recently predicted that the US and European economies will slow down in the second half of this year but are expected to rebound in 2026, at which point "the market will move beyond the reactions to tariffs and the US tax legislation."