September is historically the worst month for stocks. Here’s why

September has a bit of a bad rep on Wall Street. The ninth month of the year has historically delivered negative or weaker returns with such consistency that it has even been dubbed "The September Effect."

It's a market anomaly — an unusual pattern — but this year it is compounded with real market uncertainty. Among investor concerns: sticky inflation, rising energy prices, hawkish signals from bankers, high yields on U.S. Treasury bonds, a trade war between the U.S. and Canada, an actual war between U.S. and Iran, plus ballooning national debt and continued fears over an AI bubble.

These are, to be fair, just the negatives, and a complete picture would have to add the positives, such as soaring profits for S&P 500 companies, steady growth in the U.S. economy, and a stock market that is broadening beyond a few megacap leaders.

There is, however, one persistent concern that goes beyond September's historically weak performance. One of the market's most reliable valuation metrics has been flashing a warning light for months. And, if history is any guide, Wall Street won't like what's coming next.

To be sure, there's no metric that can tell us what's coming next, no metric…

Original source: https://www.usatoday.com/money/