Wall Street enters September after a strong August, but history suggests the rally could face a tougher test.
The S&P 500 gained more than 2% in August and continued setting record highs while Bitcoin (BTC) and Ethereum (ETH) delivered even stronger monthly gains of 24.95% and 32.5% respectively.
That leaves stocks and crypto entering September with strong momentum but also a historically unfavorable seasonal backdrop.
September Has Been Wall Street’s Weakest Month
September has consistently been one of the weakest months for U.S. stocks.
Since 1950, the Dow Jones Industrial Average has averaged a 0.8% decline in September, while the S&P 500 has averaged a 0.7% loss, according to the 2026 Stock Trader’s Almanac.
The Nasdaq Composite has performed even worse, averaging a 0.9% decline since 1971. The small – cap Russell 2000 has recorded an average September loss of 0.8% since 1979.
Bank of America data going back to 1928 paints an even weaker picture, showing an average 1.17% September decline for the S&P 500, with the index falling in 56% of years.
The seasonal weakness is often linked to institutional portfolio activity after the summer period, with fund managers potentially adjusting positions as markets return to full activity.
Strong August Leaves Stocks Vulnerable
The seasonal warning comes after an unusually strong month for equities.
The S&P 500 gained more than 2% in August and reached a record close of 7,798.99 on August 13, its 27th record close of 2026.
The Dow Jones also finished the month higher.
Corporate earnings provided much of the support. Pre-tax corporate profits reached approximately $4.8 trillion in the second quarter, representing their highest share since at least 1950.
However, investors now face several potential sources of volatility.
U.S.- Iran tensions have escalated, inflation remains above the Federal Reserve’s 2% target, and rising crude prices could complicate the interest-rate outlook.
That combination could make September particularly important for risk assets.
Bitcoin and Ethereum Face the Same Seasonal Headwind
Crypto markets are entering September with a similar historical disadvantage.
Bitcoin has averaged a 2.87% decline in September since 2013, making it the cryptocurrency’s weakest month by average performance, according to CoinGlass.
Ethereum’s historical record is even weaker. Since 2015, ETH has averaged a 9.40% September decline, according to CryptoRank.
But recent performances tell a different story.
Bitcoin has finished higher in each of the last three Septembers, including gains of 5.16% in 2025 and 7.29% in 2024.
Ethereum also gained 3.20% in September 2024.
The same pattern has appeared in equities. The S&P 500 gained 2.02% in September 2024 and another 3.5% in 2025.
So, while September has historically been weak, the most recent two years show that seasonal patterns are not guaranteed.
Bitcoin and Ethereum Enter September with Momentum
The biggest difference this year is the strength of the August rally.
Bitcoin gained 24.95% during August, while Ethereum surged 32.5%.
That creates a different setup from a market entering September after a prolonged decline.
Strong gains can attract additional momentum buyers, but they can also leave markets vulnerable to profit-taking if macro conditions deteriorate.
Bitcoin is also facing major technical resistance around the $80,000 – $86,000 region, making September’s opening sessions particularly important.
Our recent Bitcoin September outlook highlighted rising Federal Reserve rate-hike expectations, oil prices and major BTC resistance as key risks heading into the new month.
The September Test Is Bigger Than Seasonality
Historical data provides a warning, but the actual direction of stocks and crypto will depend on the macro environment.
The Federal Reserve is dealing with inflation above target, while labor-market data could influence expectations for future interest-rate policy.
At the same time, geopolitical tensions and higher oil prices could add another inflationary pressure.
That makes September a potentially important month for both Wall Street and crypto.
If equities can extend their August momentum despite the historical September weakness, it would challenge the seasonal pattern once again.
For Bitcoin and Ethereum, another positive September would similarly strengthen the argument that recent market structure and institutional demand are becoming more important than historical seasonality.
After a record setting August, September now becomes a test of whether momentum can overpower one of the market’s most persistent seasonal headwinds.
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