(BFM Stock Exchange) – September is traditionally the worst month of the year on the stock market, more than that of October yet marked by the big crash of the modern period. And taking into account the many major meetings at the agenda, investors particularly fear this ninth month of the year on the stock market.

The scholarship and seasonality. And who better than Mark Twain, creator of the characters of Tom Sawyer and Huckleberry Finn, to make this phenomenon in derision. According to the famous American writer (who had himself made a certain number of calamitous investments), October is one of the most dangerous months to play on the stock market, the other risky months being July, January, September, April, November, May, March, June, December and February.

But this joke masks a very real seasonality phenomenon (and quite unexplained with regard to modern financial theory, which would like market ineffective people to be erased over time): no, every month is not equal on the stock market.

October is renowned for a fairly calamitous month on the stock market. Among the events that forged the bad reputation of this tenth month of the year, we can cite American banking panic of 1907 (Tuesday, Thursday black on Monday of the crisis of 1929) then the “black Monday” of the 1987 Krach, during which the DOW knew its strongest daily fall, abandoning 22.6%

August also holds a sulphurous reputation of agitated months on the markets. Transactions volumes that tend to decrease in August because traders and investors go on vacation before the end of the summer. This desertion of operators can therefore lead to more volatility.

But there is a particular month which is clearly not to the advantage of investors. And ironically, it is inserted between the months of August and October: it is obviously the month of September.

An unflattering reputation that is verified

And in this month of September, the question naturally comes back to the fore. The ninth month of the year started on a hesitant note for CAC 40 which did not concede a lot of land over the first week (-0.38%). In the United States, the trend is also a little timid, only the Nasdaq completed this first week in positive territory.

This first week of September on the world’s stock markets seems to give a little credit to the poor reputation of this back to school month for the moment. “Whatever your vision of the markets, there is one thing that we can deny: September is on average the worst month of the year for almost 75 years,” said John Plassard, partner and responsible for the investment strategy cited in his morning ticket.

“It is the worst month of the year, the S&P 500 lost an average of 0.87%in September since 1950. August is the second month (the least carrier) with a negative performance of -0.20%. Which decides with the best month of the year which is November since the S&P 500 wins an average of 1.63%,” also recalled John Plassard.

The reasons for the September effect

Among the reasons that explain this historic underperformance of the indices during this ninth month of the year, John Plassard recalls the seasonality of this phenomenon, with investors modifying their portfolios at the end of the summer to “collect”.

The specialist also quotes tax reasons for the US commun funds, or “Mutual Funds” which collect their assets to recover their tax losses, since these establishments close their exercise at the end of September.

“When the fall season begins and these investors on vacation return to work, they abandon the positions they intended to sell. In this case, the market is under increased sales pressure and, therefore, a general decline,” he also argues.

A second part of risks at risk

John Plassard also recalls that the last two weeks of September have been the two worst of the year since 1950. This period will be all the more interesting to follow, notes John Plassard, insofar as investors will take note of the last monetary policy of the European Central Bank on September 11, then a week later from that of the American Federal Reserve (Fed).

It is expected to lead to the first drop in rate. The very bad report of American employment published on Friday September 5 has depressed the nail, accrediting this thesis of a monetary easing this month. According to the CME Fed Watch tool, the market grants a probability of 85.8% to a relaxation of 0.25 percentage points and even 14.2% … for a drop of 0.5 percentage points.

Other central banks will complement the agenda for this second part of the month, such as the meeting of the Bank of England, that of Japan or the Swiss National Bank.

“With an agenda responsible for central banking meetings and macroeconomic publications, September 2025 may well confirm or deny this feared reputation,” he added.

Before, the markets will be fixed on the fate of the French government. “The failure of the vote of trust on September 8, which would lead to a fall in the government, is more likely that the vote of censorship motions proposed so far by oppositions because it requires only one majority of the votes expressed (and not an absolute majority of all deputies)”, recalls Christophe Boucher, director of investments at Abn Amro Investment Solutions.

“We see political instability in France for a certain time with bond rates that are being stretched. In September, companies need liquidity and take it to the market. The month of September can therefore be a little bit dangerous,” warns David Kruk, Head of Trading Desk at La Financière de l’Achiquier, in News Bulletin 247 on Wednesday, September 3.

Should we make arms now? For David Kruk, this market risk could give rise to opportunities to make cheap purchases. “Let’s take this opportunity to buy. And if you look at every last years, it has been the case,” he added.

And therefore to take advantage of the Halloween or “Halloween Effect” effect which implies that the period from November to April offers the highest potential for the financial markets.

“There is an equation which is very simple which will raise the markets, it is that the results of companies stand well with margins which have held, anticipations which have been renewed. At the same time, the American federal reserve will lower its rates, with at least one drop in September and probably another in December,” he said.