August witnessed robust market performance, with major global equity indices achieving new benchmarks. However, historical patterns suggest September often presents a challenging landscape for equities, leading to a traditional re-evaluation of portfolios as market participants return from summer breaks to navigate a complex economic outlook.
- The S&P 500 surpassed 6,500 to establish a record high, while the Dow Jones Industrial Average also reached new peaks.
- Europe’s Stoxx Europe 600 logged its first two-month winning streak since February, signaling broad positive momentum.
- Historically, September is the weakest performing month for the Dow, S&P 500, and Nasdaq Composite.
- This seasonal headwind often prompts investors to adjust positions for the year’s remainder.
Market Performance and Sectoral Dynamics
Sectoral Performance and Economic Pressures
European sectors presented a mixed picture through the third quarter. The banking sector proved a strong performer, with shares hitting their highest levels since the 2008 financial crisis in early August. This buoyancy was largely driven by positive earnings and increased discussions around potential consolidation. Germany’s Commerzbank, for instance, extended its year-to-date gain past 100%, leading the sector’s charge.
Conversely, media stocks faced significant headwinds, declining over 8% in two months. Concerns over the disruptive impact of artificial intelligence (AI) negatively affected major European players. Advertising group WPP exemplified this trend, reporting a substantial 71% pre-tax profit fall in the first half and subsequently revising its full-year outlook downwards, highlighting vulnerabilities in the sector.
Market participants offer varied perspectives on the path forward. Mark Haefele, Chief Investment Officer of UBS Global Wealth Management, forecasts an enduring equity bull market over the next 12 months, based on an anticipated economic soft landing, robust corporate earnings, and declining interest rates. Conversely, EY-Parthenon Chief Economist Gregory Daco highlights increasing pressure on the U.S. economy, despite Q2 2025’s 3.0% annualized growth rate, which he attributed to import adjustments from earlier tariffs. A recent Barclays report predicted a slowdown in the latter half of the current year but anticipates a rebound in both U.S. and European economic growth in 2026, as markets shift focus beyond immediate tariff and U.S. tax bill impacts.
Key Economic Indicators
Upcoming Data Releases to Watch
As investors recalibrate portfolios post-summer, several key economic data releases will provide crucial indications of market direction:
| Date | Region | Event |
| Monday | U.S. | Labour Day (U.S. markets closed) |
| Monday | EU | Unemployment Rate |
| Tuesday | EU | Inflation Data |
| Tuesday | U.S. | Manufacturing Data |
| Friday | EU | Gross Domestic Product (GDP) |
| Friday | U.S. | Non-Farm Payrolls |
Oliver brings 12 years of experience turning intimidating financial figures into crystal-clear insights. He once identified a market swing by tracking a company’s suspiciously high stapler orders. When he’s off the clock, Oliver perfects his origami… because folding paper helps him spot market folds before they happen.