Investors waiting for a market pullback may have reached one of the best buying opportunities of the year.
September has historically been the worst month for the S&P 500, with the index posting an average decline of 0.6% since 1945, making it the only month with a negative average return.
While that may sound bearish, history suggests the September stock market dip has often created opportunities for long-term investors to gain exposure before stronger year-end performance.
Data from CFRA shows the S&P 500 has averaged a 0.6% loss in September since 1945. The index has also finished higher less than half the time during the month, making September the weakest period of the year for U.S. equities.
However, September’s weakness has historically been followed by stronger performance. November and December rank among the best-performing months, delivering average gains of roughly 1.4% and 1.6%, respectively, while October has typically returned to positive territory after September declines.
For investors, this suggests that seasonal selling pressure has often paved the way for a stronger fourth quarter.
The S&P 500 is currently trading near 7,718, up about 13% year-to-date and nearly 19% over the past 12 months. The index has recovered sharply from its March low near 6,317 and remains close to the record highs reached in August.
Unlike many periods of market weakness, corporate earnings remain a key tailwind. Analysts expect S&P 500 earnings growth in the mid-20% to low-30% range for 2026, driven largely by artificial intelligence spending and continued revenue growth across major sectors.
At the same time, the index trades at roughly 20 times forward earnings, a level that remains close to historical averages despite the strong profit outlook.
Wall Street’s S&P 500 outlook
The bullish case for buying the S&P 500 during a seasonal dip is further supported by forecasts from some of Wall Street’s largest banks.
In this case, Goldman Sachs expects the benchmark index to reach 8,000 by the end of 2026, supported by continued earnings growth and strong demand for artificial intelligence infrastructure. UBS Global Wealth Management has a target of 8,100, citing resilient economic growth and rising corporate profits.
RBC Capital Markets is even more optimistic, projecting the S&P 500 will climb to 8,150 over the next 12 months as earnings continue to improve and inflation pressures moderate.
JPMorgan has also raised its year-end target to 8,000, reflecting confidence that corporate earnings can continue growing into 2027.
Together, these forecasts imply additional upside from current levels despite the index already trading near record highs.
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