September is proving to be a challenging month for investors, living up to its historical reputation as a tough time for stocks. The S&P 500 experienced a significant decline of 4.2% last week, driven by growing concerns regarding the U.S. economy’s health. The monthly jobs report released on Friday revealed that job additions fell short of expectations, while Tuesday’s disappointing manufacturing data resulted in the index’s worst performance since early August.
Historically, September has been the weakest month for the S&P 500, with the index declining an average of 1.2% since 1928. In fact, it has ended lower 56% of the time during this period, according to Dow Jones Market Data.
As investors look ahead, all eyes will be on Wednesday’s inflation report to assess whether price pressures are easing. Additionally, the performance of major tech stocks, particularly Nvidia, will be closely monitored as they attempt to recover from recent losses. Analysts and portfolio managers are grappling with a more pessimistic outlook following a robust rally in the first half of 2024.
“We were already tensed up [ahead of the jobs report], and now it seems like economic data is not moving in the right direction,” said Callie Cox, chief market strategist at Ritholtz Wealth Management.
The Federal Reserve is widely anticipated to cut interest rates at its upcoming meeting on September 18. The key question remains whether the Fed will opt for a traditional quarter-percentage point reduction or take a more aggressive stance with a half-point cut.
Market observers, including Cox, were left wanting for clarity after the jobs report. While job growth in August was stronger than the previous month, the overall numbers still fell short of expectations, and the unemployment rate edged down.
Some investors are advocating for a more substantial rate cut to stimulate the labor market, while others express concern that such a move could send a negative signal to financial markets, potentially triggering a deeper downturn.
In addition to the uncertainty surrounding the Fed’s plans, market volatility is expected to persist as the November election approaches. Historically, October has been the weakest month for stocks during election years, with the S&P 500 averaging a decline of 1.4% since 1980.
Despite the S&P 500 being up 13% year-to-date, sentiment has shifted in recent weeks. The weaker-than-expected jobs report in July raised questions about the economy’s resilience and whether the Fed had delayed necessary rate cuts. The unwinding of popular trades on August 5 further exacerbated the situation, leading to the S&P 500’s worst day in nearly two years.
This downturn has reshuffled the market’s winners and losers, with Nvidia and other AI-related stocks losing some of their luster. Nvidia’s stock plummeted 14% last week, erasing a staggering $405.7 billion in market value—the largest loss for any company on record. In response, investors have shifted their focus to defensive stocks, with only the consumer staples and utilities sectors showing gains this month.
Should the S&P 500 finish September in the red, it would mark its fifth consecutive decline for the month.
The extent to which the so-called “September effect” influences market behavior remains uncertain. One prevailing theory suggests that traders returning from vacation may sell off their winners and harvest tax losses, amplifying market movements, according to Jay Woods, chief global strategist at Freedom Capital Markets.
“September kicked us in the teeth on day one,” Woods remarked. “Now, we’ll have to see if we can recover.”
Despite the recent market downturn, some metrics indicate that stocks may still be overvalued. Companies within the S&P 500 are currently trading at 21 times their projected earnings for the next 12 months, surpassing the 10-year average multiple of 18, as reported by FactSet.
In the bond market, Treasury yields fell following the jobs report, with the benchmark 10-year Treasury yield closing at 3.710%, its lowest level of the year. Typically, bond yields decline as prices rise, as investors seek the safety of U.S. Treasurys during turbulent market conditions.
“The question is how much does the Fed need to react to the idea of a slowing labor market as opposed to a shrinking labor market,” posed Steve Sosnick, chief strategist at Interactive Brokers.
As September unfolds, investors will be keenly watching for signs of recovery amid the prevailing uncertainty.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
