The S&P 500 has held above its 200-day moving average, and September may have avoided the curse of a major crash in the "worst month."

The US stock market bull run has found a crucial technical support level. Historical data shows that September is the worst-performing month for the S&P 500 throughout the year, but when the index enters September above its 200-day moving average, its downside risk narrows significantly—which is precisely the current market situation.

In a research report over the weekend, Oppenheimer & Co. noted, "The worst returns in September often occur when the S&P 500 starts the month below its 200-day moving average, but that hasn't happened yet." On Monday, the S&P 500 closed at 7,686.14, down 0.3% for the day, but still well above its 200-day moving average of 7,122.92.

Oppenheimer’s head of technical analysis, Ari Wald, said in an interview on Monday that the recent upward trend of the index has put it in a relatively favorable position, and there are currently no signs of a “major breakdown” in the US stock market, which at least helps the index avoid an “extreme scenario of a sharp decline” in September.

Meanwhile, Nicholas Colas, co-founder of DataTrek Research, is also optimistic about future trends, believing that the strong rebound of the S&P 500 from its lows this year has laid a positive foundation for its performance in the next 100 trading days.

Technical analysis provides support; the 200-day moving average is a key dividing line.

According to historical data compiled by Oppenheimer since 1950, when the S&P 500 enters September above its 200-day moving average, the average monthly gain is 0.2%; while when the index starts September below its 200-day moving average, the average decline is as high as 3%. There is a significant difference between the two scenarios.

According to Dow Jones market data, since 1928, September has been the worst-performing month for the S&P 500 on average, with an average decline of 1.1%. However, the S&P 500 is currently not only holding above its moving averages, but is also only 1.4% below its all-time closing high of 7,798.99 on August 13, indicating a relatively intact technical structure.

Wald stated that from a technical perspective, the current market "still faces below historical average top risk" and believes that "the pattern of a fourth-quarter rebound extending into 2027 is taking shape." He also cited a common market saying to emphasize:

"Bull markets don't die of age."

August saw its best performance since 2021, with a cumulative increase of over 12% for the year.

The recently concluded month of August has provided ample confidence for the bulls. According to FactSet data, the S&P 500 rose 2.6% in August, its best performance for the month since August 2021, when it gained 2.9%. August's gain is also the largest monthly increase this year since May's 10.4% surge.

Looking at a longer time horizon, the S&P 500 has risen 12.3% year-to-date, on track for its fourth consecutive year of positive returns. Over the past 12 months, the index has gained 19%.

In a report released Monday, Nicholas Colas noted that the S&P 500 achieved a "statistically significant" gain of approximately 21% over the 100 trading days from its closing low on March 30 to August 21. Historically, after such a large rebound exceeding two standard deviations, the average return over the next 100 trading days, while declining somewhat in the current bull market, has remained positive.

Macroeconomic factors and geopolitical risks became the main variables in September.

With the second-quarter earnings season for S&P 500 companies nearing its end, market focus will shift to the macro level in September. Jack Janasiewicz, a multi-asset portfolio manager at Natixis Investment Managers, said in an interview on Monday that investors will be closely watching inflation data, as inflation remains high, meaning the possibility of a Federal Reserve rate hike cannot be completely ruled out.

Geopolitical risks should not be ignored. U.S. stocks fell broadly on Monday, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closing lower, partly due to rising oil prices driven by escalating tensions in the Middle East. It is reported that the U.S. and Iran exchanged fire over the weekend, marking the first significant military action in the conflict in over a month.

Colas points out that the market will span 100 trading days from now until the end of January 2027, bridging the historically volatile September and the highly seasonal fourth quarter. The interplay of these two characteristics will make this a critical window for the market to navigate with caution.

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