4 Factors to Watch Out for in October as Wall St. Wraps Up Rocky September
Stocks on Wall Street tumbled throughout September as renewed worries over inflation and fresh uncertainty surrounding the future path of the Federal Reserve’s interest rates rattled investors.
Heading into the final trading session of the month, Wall Streets’ three major indexes are on track to record their worst month of 2023.
The tech-heavy Nasdaq Composite is down the most, plunging about 6% during the month, amid surging Treasury yields. Meanwhile, the benchmark S&P 500 and the blue-chip Dow Jones Industrials Average are on pace to close 4.6% and 3% lower, respectively.
As a brutal September comes to an end, investors should prepare themselves for further turmoil in October, which historically is a spooky month for stocks.
Several of the greatest crashes in stock market history have occurred during the month, including ‘Black Tuesday’ and ‘Black Thursday’ in 1929, as well as ‘Black Monday’ in 1987 and the worst of the 2008 financial crisis meltdown.
Source: Hulbert Ratings
In addition, the U.S. stock market historically has experienced extraordinary volatility in October. According to research from LPL Financial, there are more 1%-or-larger swings in October in the S&P 500 than in any other month in history, dating back to 1950.
Some have dubbed this market oddity as the ‘October Effect’.
With investors continuing to gauge the outlook for the economy, inflation, and interest rates, a lot will be on the line in the month ahead. Here are the four factors to watch out for:
Federal elected officials have only until midnight on Saturday, September 30 to come up with a deal to fund federal agency programs or face the prospect of a government shutdown on Sunday, October 1.
Republican U.S. House Speaker Kevin McCarthy this
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