S&P 500 Looks Fine Going Into October. Is the Number Underneath a Warning?
October now begins with one among the strongest seasonal information of the 12 months. However, market breadth has dropped to its lowest stage since May 2025.
S&P 500 Leaves Its Worst Month Behind
Barchart knowledge reveals September is the solely month with a unfavorable common return for the SPDR S&P 500 ETF (SPY) since 2010. The fund has misplaced 0.48% in a median September.
October, in distinction, ranks as the third-best month. SPY has averaged a 2.27% acquire, behind solely November at 3.09% and July at 2.79%.
September’s document is extra combined than its repute suggests. SPY rose in 10 of the final 17 Septembers, together with a 0.26% acquire this 12 months. A couple of sharp drops, resembling 9.24% in 2022 and 6.94% in 2011, pulled the common decrease.
Historically, October has typically rebounded after a weak September. In 2011, a 6.94% September loss gave method to a 10.91% October rally. Similar recoveries adopted in 2021 and 2022.
Still, the sample presents no assure. Three of the final six Octobers ended decrease, in 2020, 2023, and 2024. SPY enters the month up 13.37% for the 12 months.
75% of S&P 500 Stocks Fell in September
The index’s small acquire masked weak point throughout most of its members. FactSet knowledge, visualized by Deena Zaidi, reveals about 75% of S&P 500 shares closed September decrease.
Losses reached each sector as Treasury yields climbed throughout the month. Banks fashioned one among the largest purple blocks, with JPMorgan, Bank of America, and Wells Fargo all declining. Software names, together with Salesforce, Adobe, and Oracle, additionally fell.
Meanwhile, the positive factors got here from a few pockets. Micron, Apple, and Dell rose in know-how, extending the market’s reliance on AI {hardware}. GE Vernova and Eli Lilly additionally posted positive factors.
As a consequence, a slim group of huge firms saved the index afloat whereas most shares retreated.
S&P 500 Breadth Hits Its Weakest Level Since May 2025
The 200-day shifting common measures a inventory’s long-term pattern. Only 40.55% of S&P 500 shares now commerce above it, that means practically 60% sit under.
The studying fell 2.59 factors on Sept. 30 alone. It peaked close to 73% in August, so breadth has dropped about 32 factors in roughly six weeks.
The indicator now sits under its April 2026 low of about 42%. Notably, that earlier trough got here earlier than a rally that lifted breadth to its August high.
What October Could Bring
Seasonality favors the S&P 500 in October. However, the index enters the month with its weakest participation in additional than a 12 months.
A broad restoration would possible require extra shares to reclaim their 200-day averages. Without that, the index might preserve counting on a small group of huge caps.
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