Binoculars or telescope on top of skyscraper at observation deck to admire the city skyline at sunset.Telescope located on the Beijing Olympic Tower

Our Top Market Takeaways for September 8, 2023

Market update: Little fires everywhere

September seems to be picking up August’s angst.

Heading into the weekend, bond yields have continued to swing on a round of hot growth data, and that, combined with word that China is ramping up pressure on Apple, has sent tech stocks and the broader market tumbling. Apple has lost about $200 billion worth of market cap (roughly the size of Netflix!) over the last two trading days.

The gloomy sentiment has only added to frustration that September is historically the worst month of the year for stocks, going back as far as 1950. Those seasonal swings, alongside still pretty full valuations, could mean that stocks continue to gyrate around headlines and too hot or too cold data.

Yet, that may not be a reason to sit on the sidelines. A closer look shows that in the 10 times since 1950 that the S&P 500 has been up at least 10% year-to-date and it’s been down in August (just like this year), September has been higher eight of those times – with a median return of +2.6%.

This chart shows returns in years with negative August returns and positive YTD returns through August.

Past performance is no guarantee of future results. It is not possible to invest directly in an index.

Looking into the final months of the year, a number of catalysts are on the horizon – and could give markets the push they need to find direction. Today, we explore five we’re focused on.

Spotlight: Catalysts through year-end: 5 things to watch for

1) Inflation: Could it be reaccelerating?

Some wonder if progress could be petering out – especially as segments like energy and core goods (which led the bulk of the price declines over the last year) are showing some signs of reaccelerating.

The next few reports will probably show inflation tick higher, and that may reignite some nerves. But, we don’t think it’s enough to offset the larger trend of cooler prices. Rent prices still have a lot of progress to make, and softer wage growth should help temper inflation in other core services (like education and hospitality) that have been especially sticky.

We’re seeing some signs of this already: The rate of those voluntarily leaving their jobs (the quits rate) has fallen back to where it was before the pandemic. And just this week, Walmart, which is the largest private employer in the world, said it's cutting pay for some entry-level workers.

What to watch: Looking to next week’s U.S. Consumer Price Index (CPI) print, a bigger headline inflation number may dominate the tape, but the balance under the surface will be key. How much will disinflation leaders reaccelerate? And how quickly will sticky pockets come back down?

2) The Fed: Will it signal rate cuts?

The debate around “is the Fed done?” seems exhausted. Whether the U.S. central bank pauses or has another hike left, the market’s expectation for the Fed’s “terminal” rate has hardly moved all summer.

The real question is how long a pause might last, and when and how quickly policymakers can start cutting rates. Just two months ago, investors were betting on Fed funds finishing 2024 around 3.75%; now, that stands around 4.40% (suggesting 65 basis points fewer cuts than before, with the first cut not coming until summer).

There’s some reason to believe it could potentially be on the earlier side. If inflation continues to cool at the same time the Fed holds rates, this means the real policy rate (the nominal policy rate minus inflation) is getting more restrictive without the Fed doing anything at all. That means just to keep rates as restrictive as they are today, the Fed would need to cut.

The chart describes the real Fed funds rate (Fed funds rate minus core PCE inflation) in %.

What to watch: The Fed’s 2024 dot at its meeting on September 20th. Right now, it’s at 4.625%, signaling even less cuts than the market.

3) Earnings: The push of costs vs. the pull of demand

The latest earnings season was better than expected, and the Street sees even greener pastures ahead: Expectations for S&P 500 earnings for the next 12 months are pretty much back to where they were last summer. To us, such strong earnings make otherwise full valuations for stocks look worth it.

The chart describes the S&P 500 next 12 months earnings per share (EPS) estimates in money.

It is not possible to invest directly in an index.

But there are still risks. The Fed’s latest Beige Book, which surveys dozens of district banks, noted that more companies seem to be struggling to pass their own costs onto their customers.

What to watch: Stronger earnings are surely welcome, but margins (which measure the degree to which sales become profits) also matter. Seeing margins stabilize (after declining steadily since 2021) could offer an encouraging sign.

This chart shows S&P 500 net profit margins from Q2 2018 to Q2 2023 (Q2 2023 value is estimated from FactSet).

It is not possible to invest directly in an index.

4) Capex: Can momentum continue?

The U.S. economy’s strong showing this year has been partly in thanks to government policies focused on reviving America’s industrial heartbeat – together, the 2021 Infrastructure Investment and Jobs Act (IIJA), the 2022 Inflation Reduction Act (IRA), and the 2022 CHIPS and Science Act (CHIPS) include almost $2.4 trillion in funding.

Now, that, combined with ongoing reshoring and investment in the energy transition, is translating into real company spending on infrastructure, AI, and the like. Rounding out Q2 earnings season, over 60% of S&P 500 companies increased capex over the last year. Can more join in?

Why it matters: There’s a big debate over whether all this capex is a sign that the economy might be getting more productive. If it is, it could level-up future growth.

5) Washington: Is there risk of a government shutdown?

Congress has to pass a short-term spending deal (a “continuing resolution”) by midnight on September 30th to keep the government’s lights on. The House comes back from its summer recess on September 12th, leaving just about three weeks to get an agreement in order.

Without it, all “nonessential” departments – like the Environmental Protection Agency, the Labor Department, and parts of the IRS – will be forced to power down. In essence, the government “shuts down.”

We’ve seen a handful of government shutdowns before, with the longest in 2018 (which lasted over a month). But, while the impact grows the longer it lasts, the hit to growth and stocks is typically short-lived. Looking at the last 20 government shutdowns (from the time they started to ended), U.S. stocks have actually been about flat on average.

The chart shows the S&P returns during prior U.S. government shutdowns.

Past performance is no guarantee of future results. It is not possible to invest directly in an index.

What to watch: A deeply divided Congress makes things more difficult, and some policymakers seem to be demanding concessions before approving a plan.

Investment implications: We still see the potential

At the start of the year, we asked investors to see the potential for stronger markets, and so far, even amidst a flurry of risks and bouts of volatility, that’s tracked.

Global stocks are up +15% year-to-date, while global bond returns (-0.6%) have been tougher as yields have climbed. But together, a 60/40 portfolio has returned almost +10% – well above the 7.2% annual return our Long-term Capital Market Assumptions (which estimate returns for the next 10-15 years) would typically expect.

This chart shows 2023 YTD and summer returns in USD terms, with summer defined as May 31, 2023 to September 7, 2023.

Past performance is no guarantee of future results. It is not possible to invest directly in an index.

To us, that means the 60/40 is back, and today’s market offers an opportunity to rebuild and strengthen your core for the months ahead.

Your J.P. Morgan team is here to help.

All market data from FactSet and Bloomberg Finance L.P., 9/7/23.

Connect with a Wealth Advisor

Our Wealth Advisors begin by getting to know you personally. To get started, tell us about your needs and we’ll reach out to you.

Connect now


Small capitalization companies typically carry more risk than well-established "blue-chip" companies since smaller companies can carry a higher degree of market volatility than most large cap and/or blue-chip companies.

International investments may not be suitable for all investors. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be as politically and economically stable as the United States and other nations. Investments in international markets can be more volatile.

Diversification does not ensure a profit or protect against loss.

The Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Bloomberg Eco Surprise Index shows the degree to which economic analysts under- or over-estimate the trends in the business cycle. The surprise element is defined as the percentage difference between analyst forecasts and the published value of economic data releases.

The NASDAQ 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the NASDAQ stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care, and others.

The MSCI World Index is a broad global developed markets equity benchmark designed to support: Asset allocation: Consistent, broad representation of the performance of developed equity markets worldwide, without home bias.

The Bloomberg Aggregate Bond Index or "the Agg" is a broad-based fixed-income index used by bond traders and the managers of mutual funds and exchange-traded funds (ETFs) as a benchmark to measure their relative performance.

The NYSE FANG+ Index is an equal-dollar weighted index designed to represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies such as Facebook, Apple, Amazon, Netflix, and Alphabet's Google.

We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.


  • Past performance is not indicative of future results. You may not invest directly in an index.
  • Investing in fixed income products is subject to certain risks, including interest rate, credit, inflation, call, prepayment and reinvestment risk. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss.
  • The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Equity securities are subject to 'stock market risk' meaning that stock prices in general may decline over short or extended periods of time.
  • The prices and rates of return are indicative, as they may vary over time based on market conditions.
  • As a reminder, hedge funds (or funds of hedge funds) often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. These investments can be highly illiquid, and are not required to provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distributing important tax information. These investments are not subject to the same regulatory requirements as mutual funds; and often charge high fees. Further, any number of conflicts of interest may exist in the context of the management and/or operation of any such fund. For complete information, please refer to the applicable offering memorandum.
  • Structured products involve derivatives and risks that may not be suitable for all investors. The most common risks include, but are not limited to, risk of adverse or unanticipated market developments, issuer credit quality risk, risk of lack of uniform standard pricing, risk of adverse events involving any underlying reference obligations, risk of high volatility, risk of illiquidity/little to no secondary market, and conflicts of interest. Before investing in a structured product, investors should review the accompanying offering document, prospectus or prospectus supplement to understand the actual terms and key risks associated with the each individual structured product. Any payments on a structured product are subject to the credit risk of the issuer and/or guarantor. Investors may lose their entire investment, i.e., incur an unlimited loss. The risks listed above are not complete. For a more comprehensive list of the risks involved with this particular product, please speak to your J.P. Morgan team.
  • Additional risk considerations exist for all strategies.
  • The information provided herein is not intended as a recommendation of or an offer or solicitation to purchase or sell any investment product or service.
  • Structured products are complex debt obligations of a corporate issuer the return of which is linked to the performance of an underlying asset. They are significantly riskier than conventional debt instruments and may not be suitable for all investors.
  • Investment in alternative investment strategies is speculative, often involves a greater degree of risk than traditional investments including limited liquidity and limited transparency, among other factors and should only be considered by sophisticated investors with the financial capability to accept the loss of all or part of the assets devoted to such strategies.
  • Opinions expressed herein may differ from the opinions expressed by other areas of J.P. Morgan. This material should not be regarded as investment research or a J.P. Morgan investment research report.


All companies referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by J.P. Morgan in this context.

Bonds are subject to interest rate risk, credit and default risk of the issuer. Bond prices generally fall when interest rates rise. Investing in fixed income products is subject to certain risks, including interest rate, credit, inflation, call, prepayment and reinvestment risk. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss.

This material is for information purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). The views and strategies described in the material may not be suitable for all investors and are subject to investment risks. Please read all Important Information.

  • The Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

GENERAL RISKS & CONSIDERATIONS. Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

NON-RELIANCE. Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.


In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.