The U.S. stock market suffered a rough start in September! Worst first-week performance since 1953
In the first week of September 2023, the S&P 500 index in the United States recorded its worst performance since 1953, initially falling by 4.25%. This marks the fifth time in history that the S&P 500 index has performed poorly in the first week of September. Last week, the stock market experienced a significant decline, ending the previous three weeks of gains. Compared to similar years in the past, only one instance saw an end-of-month increase, with the trend being weak in other years. Furthermore, research by Bespoke indicates that in such situations, subsequent gains are usually much lower than the losses
According to the information obtained from Zhitong Finance and Economics APP, based on data from Bespoke Investment Group, the S&P 500 index had a very poor performance at the beginning of September, which is historically one of the more volatile months in the U.S. stock market.
In an email on Monday, Bespoke stated, "Since the implementation of the current form of the five-day trading week in 1953, the first week of September this year has been the worst first week performance for the S&P 500 index in history." According to FactSet data, the S&P 500 index fell by 4.25% at the start of September.
The company further pointed out, "Historically, there have only been four instances where the S&P 500 index has fallen by more than 2.5% in the first week of September." Previously, the worst record at the start of September was in 2001, with other instances occurring in 1987, 2008, and 2015.
The U.S. stock market saw a sharp decline last Friday, following a lower-than-expected jobs report. Both the S&P 500 index and the Dow Jones Industrial Average recorded their largest weekly declines since March 2023 in a shortened trading week due to the Labor Day holiday. The market decline last week also ended the three-week upward trend for the Dow Jones and S&P 500 indices.
Bespoke's research shows that in the other four years when the S&P 500 index fell by at least 2.5% in the first week, "the performance for the rest of the month tends to be weaker," with the index continuing to fall three times and rising only once.
Bespoke also studied the historical performance of the S&P 500 index from September 7th or the most recent closing price before that date to the end of the year. Their research indicates that since 1953, the median increase for the remainder of the year for the S&P 500 index is 4.16%, with a 76% probability of an increase.
However, for the four years when the S&P 500 index fell by more than 2.5% in the first week of September, the performance for the rest of the year was mixed, with gains and losses almost equal, but the magnitude of gains was much smaller than the magnitude of losses. In the years of continued decline, the losses were four times greater than the gains.
For example, in 1987, the S&P 500 index fell by about 22%, while in 2008, it fell by over 27%. The stock market crash in 1987 occurred in October, while the collapse of Lehman Brothers in September 2008 exacerbated the global financial crisis.
The decline of the S&P 500 index last Friday reduced its cumulative increase for 2024 to 13.4%, with the index dropping by 4.6% from its historical closing high on July 16th This Monday, the U.S. stock market opened higher, rebounding from the sharp decline on Friday. According to FactSet data, as of late Monday morning, the S&P 500 index rose by 0.6%, the Dow Jones Industrial Average rose by 0.9%, and the Nasdaq Composite Index rose by 0.5%.
Bespoke stated: "The morning's rise lacks clear driving factors, and economic data is relatively scarce." The company also pointed out that the New York Fed's consumer expectations survey has been closely watched in recent months, but as the Fed has shifted its focus from inflation to employment, the report's impact is not as significant as before