Stocks had their first positive September in five years thanks to lower rates, AI and Chinese stimulus.
The S&P 500 rose 2 percent between Friday, August 30, and Monday, September 30. It was the ninth gain in the last 10 months, with the index closing above 5,700 for the first time. The Nasdaq-100, Dow Jones Industrial Average and Russell also climbed.
Ironically, the month began with selling as traders took profits following August’s bounce. But then the S&P 500 held a key level and Nvidia (NVDA) eased worries about its Blackwell AI chips. Prices quickly rebounded and jumped above their July peak after the Federal Reserve cut interest rates by 50 basis points.
The central bank made a big pivot by emphasizing the need to support employment instead of fighting inflation. That’s consistent with lower interest rates over time. The change was potentially vindicated after Saudi Arabia hammered crude oil with plans for increased production.
Artificial intelligence remained a big theme, but the excitement shifted away from typical names like NVDA. Instead buyers jumped into companies like Vistra (VST) that can benefit from electricity demand.
Another boost came on September 24 when China started announcing stimulus for its financial markets and economy. That lifted U.S. companies like Las Vegas Sands (LVS) and Wynn Resorts (WYNN), which operate casinos in Macau.
Several large growth stocks had interesting moves. Tesla (TSLA) climbed 22 percent on optimism about its quarterly deliveries this week. Oracle (ORCL) beat estimates and confirmed the growth of AI is fueling demand, lifting its shares 20 percent. Palantir Technologies (PLTR) rallied 18 percent after being added to the S&P 500. Meta Platforms (META) climbed 9 percent to new record highs as CEO Mark Zuckerberg unveiled new augmented reality products.
This month starts with deliveries from TSLA and key employment data on Friday. Earnings season starts with big financials like JPMorgan Chase (JPM) next Friday, October 11. Inflation data on October 10 and retail sales on October 17 could also impact sentiment. See below for more.
Big Moves in September
| Top Gainers in the S&P 500 Last Month | ||
| Vistra Energy (VST) | +39% | The nuclear-power company rallied on optimism about electricity demand, especially from AI data centers. |
| Constellation Energy (CEG) | +32% | The utility company will reopen a nuclear plant to serve Microsoft (MSFT) under a multiyear contract. |
| United Airlines (UAL) | +30% | The airline rallied as fuel costs fell and Wall Street anticipated strong pricing and traffic. |
| Las Vegas Sands (LVS) | +29% | The casino operator jumped as Chinese stimulus plans boosted the outlook for its business in Macau. |
| GE Vernova (GEV) | +27% | The clean-energy company reaffirmed guidance, spurring bullish comments from several analysts. |
| Top Decliners in the S&P 500 Last Month | ||
| Dollar Tree (DLTR) | -17% | The discount retailer missed estimates and issued weak guidance. |
| APA (APA) | -14% | The energy stock declined as growing supply and weak demand dragged crude oil lower. |
| Moderna (MRNA) | -14% | The vaccine developer cut its R&D budget, triggering worries about its pipeline of new drugs. |
| Devon Energy (DVN) | -13% | The energy stock followed crude-oil prices lower in September. |
| Boeing (BA) | -12% | The aerospace company slid as workers went on strike and Moody’s considered cutting its credit rating. |
Sector Watch
| Consumer Discretionary | +7.1% |
| Utilities | +5.9% |
| Communications | +3.5% |
| Industrials | +3% |
| Real Estate | +2.6% |
| Technology | +2.5% |
| Materials | +2.2% |
| S&P 500 | +2% |
| Consumer staples | +0.6% |
| Financials | -0.9% |
| Health Care | -2% |
| Energy | -3.8% |
Key Economic Events in August
Below are some key economic events from last month.
- Weak manufacturing data triggers slowdown worries: The Institute for Supply Management’s manufacturing index missed estimates amid weak orders and production. Business leaders noted slack in the economy with interest rates still high. Electoral uncertainty was also cited. (9/3)
- Jobs miss but wages beat: U.S. employers added 142,000 jobs in August, 18,000 fewer than forecast by economists. Hourly earnings were higher than expected and unemployment declined for the first time in six months. (9/6)
- Housing data beats as mortgage rates fall: Housing starts and building permits rose more than expected in August. Single-family activity accelerated as mortgage rates fell to their lowest levels in more than a year. (9/16)
- Fed starts easing cycle with big rate cut: The Federal Reserve lowered interest rates by 50 basis points and forecast another 50 basis points of easing this year. Policymakers emphasized supporting employment more than fighting inflation, a significant change. (9/18)
What Experts Are Saying
Below are some noteworthy commentaries:
- AI is replacing inflation as the major corporate buzzword, according to FactSet. The research firm noted that mentions of inflation are falling on quarterly earnings calls, while more executives are talking about AI. (9/13)
- Institutional investors were net buyers of stocks in August for the first time since December, according to S&P Global. (9/18) A separate report from Citi found that family offices were the most bullish in years. (9/20)
- BMO strategist Brian Belski raised his yearend target on the S&P 500 to 6,100 from 5,600. He cited rate cuts by the Fed and positive yearend seasonality. It’s the highest on Wall Street, according to Markets Insider. (9/20)
- The stock market has a “nearly perfect environment,” given the economic growth, corporate profits and low unemployment, Roger Altman told CNBC. Altman is the founder of Evercore and a former Deputy Treasury Secretary. (9/23)
- Analyst estimates suggest the S&P 500 may reach 6,288 in a year, according to FactSet. The research firm used median target of individual stocks. Energy, communications and technology had the most implied upside. (9/27)
Popular Futures Contracts in September
| Product | Current Month | Expiration | Next Month | 1-Mon% |
| S&P 500 E-Mini (@ES) | ESZ24 (Dec) | 12/20/24 | ESH25 | +1.6% |
| Nasdaq-100 E-Mini (@NQ) | NQZ24 (Dec) | 12/20/24 | NQH25 | +2% |
| Dow Jones E-Mini (@YM) | YMZ24 (Dec) | 12/20/24 | YMH25 | +1.4% |
| Russell 2000 E-Mini (@RTY) | RTYZ24 (Dec) | 12/20/24 | RTYH25 | +0.2% |
Newsworthy Events This Month
| Date | Event | What to Watch For |
| Fri 10/4 | Non-farm payrolls | Hiring and wage trends in July |
| Wed 10/9 | Minutes from September Federal Reserve meeting | Policymaker commentary on interest rates, employment and inflation |
| Thu 10/10 | Consumer price index (CPI) / Tesla Robotaxi event | September inflation data is due. Separately, TSLA plans to unveil new vehicles. |
| Thu 10/17 | Retail sales | The strength of consumer spending |
| Wed 10/30 | Gross domestic product (GDP) | Initial reading of Q3 economic growth |
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