[Animated glitches containing various letters flip to spell out the following financial terms]
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Bear Market
Business Cycle
Risks
Bull Market
Fixed Income
Inflation
Equities
Diversification
Interest Rates
Opportunities
Geopolitics
Market Catalysts
Market Decode™
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[Marci McGregor speaking on camera throughout]
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Please see important information at the end of this program. Recorded on 9/17/2026.
On screen copy:
Marci McGregor
Head of Portfolio Strategy
Chief Investment Office
Merrill and Bank of America Private Bank
We looked back through nearly a century of market history and found that September's bad reputation on Wall Street is partly deserved. But the calendar alone doesn't determine what comes next.
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Septembers Since 1928:
- Average S&P 500 return: -1.1%
- Positive only 45% of the time
Source: Bloomberg as of September 16, 2026.
Past performance is no guarantee of future results.
Since 1928, it's been the weakest month of the year for the S&P 500 with an average return of negative 1.1%. and September is the only month when the index has ended down more often than up, with positive returns just 45% of the time.
The pattern tends to hold in midterm election years. Since 1950, the S&P 500 has averaged a negative 0.8% return for September. Of course, that's just the average. What actually happens can vary quite a bit depending on the economic backdrop.
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September 2022:
▪ S&P 500 dropped 9.3%
Source: Bloomberg
Past performance is no guarantee of future results.
Take September 2022. The S&P 500 dropped 9.3%. What was going on? The Fed was aggressively raising interest rates, inflation was at historic levels and anxiety over the possibility of a recession was building. So, while the seasonal pattern can set the tone, the fundamentals still matter most.
Why has September tended to be weaker? Second-quarter earnings are mostly in the rearview mirror, so the corporate calendar gets a bit quieter.
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What's Behind Bumpy Septembers?
- Focus on economic data and the Fed
- Corporate blackout period
- Post-summer rebalancing
That turns market attention more onto economic data and the Fed. At the same time, companies start entering their pre-earnings blackout periods, which can mean less corporate buying while investors rebalance portfolios after the slower summer months.
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Average S&P 500 Returns Post-September Since 1928:
- October: +3.0%
- November: +2.7%
- December: +0.8%
Source: Bloomberg data through 2022.
Past performance is no guarantee of future results.
But here's the glimmer of light through the clouds: the historical pattern has tended to improve after September in midterm election years. Volatility has typically peaked in October and then eased after elections, while average S&P 500 returns in October, November and December have been positive.
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Since 1950, the S&P 500 has not been negative in the 6 or 12 months following a midterm election.
Source: Bloomberg data through 2022.
Past performance is no guarantee of future results.
The longer-term record is notable. Since 1950, the S&P 500 has not once been negative in the six or 12 months after a midterm election. That doesn't guarantee the same result each election cycle, but history suggests some of the uncertainty may fade once the election is over.
So, what should investors take away here? With inflation still a concern, interest rates and oil prices elevated, and the midterm elections getting closer, we wouldn't be surprised to see a pullback, or simply more market volatility, in the Fall.
But keep in mind we still see a constructive backdrop for U.S. stocks right now. Corporate profits and earnings revisions remain strong, manufacturing activity is improving, investment in AI is continuing and the consumer remains resilient. Given all of that, we'd consider potential periods of market weakness as entry points for equity investors.
And that's the Market Decode.
On screen disclosures:
Important Disclosures
The opinions expressed are as of 9/17/2026 and are subject to change.
Past performance is not a guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad.
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The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
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[End of transcript]
September has earned a tough reputation on Wall Street. Since 1928, it has been the weakest month of the year for the S&P 500, with an average return of negative 1.1%.Footnote 1 But the calendar alone doesn't determine what comes next. Economic conditions, Federal Reserve policy, corporate activity and investor positioning can all shape the market's direction. History has also shown that the three months after September have, on average, delivered positive returns for the index.Footnote 2
In the video above, Marci McGregor, head of Portfolio Strategy in the Chief Investment Office for Merrill and Bank of America Private Bank, runs through some of the reasons behind September's volatility. She also looks at the pattern in midterm election years, and a key lesson that could be learned from the Fall months. "Consider potential periods of market weakness in the Fall as entry points for equity investors," says McGregor.