Will the Stock Market Crash in September? 10+ Strong Reasons Say Yes

📉Will the Stock Market Perform Worse in September? Here Are 10+ Reasons Why It Might

Friends, for a long time, our market has not performed well. But can the market perform worse in this month of September? Or maybe crash? Today we are going to talk about this in detail.

We have found a lot of reasons — more than 10 in total. So read this article carefully.

📆 Historical September Performance

Let’s start with the obvious: it’s the month of September.

Historically, the market has not done well during this time.

If we go back to 1928, the S&P 500 has, on average, performed poorly in the month of September.

Average return of S&P 500 in September: -1.1%
No strong fundamental reason — but it has been observed consistently
This data is based on almost a decade of experience

Some possible reasons behind this recurring trend:

Seasonal consumer spending decreases
FIIs (Foreign Institutional Investors) rebalance their portfolios
Mutual funds often make large withdrawals during this period

🔎 Practical Reasons Why This September May Be Worse

Now let’s understand practical, real-time reasons why this month’s market may perform even worse.

1. 🇺🇸 Trump’s Tariffs and Economic Warning

2. 🇮🇳 GST Slabs Restructured – But No Market Reaction?

Trump has imposed tariffs on India
He warned that if the US Supreme Court rejects the tariffs, it could lead to an economic disaster
While his statements are often exaggerated, if he's right, it may lead to global market turmoil
Trump has repeatedly hinted at a possible US economic slowdown

Indian government has reduced GST slabs to:
- 18%
- 5%
- (A third slab of 40%, applied to very few items)
Such a major decision should have impacted the market positively
But since there was no market movement, it implies:
- This news was already priced in
- The market is currently at a fair valuation or even overvalued

🔢 Open Interest Data Signals Caution

Looking at the option chain data for 30th September expiry
At the 25,000 strike price:
- Put open interest decreased by 1.5 lakh
- Call open interest increased by 71,250

➡️ This indicates that big investors don't expect the market to cross 25,000 by September end, pointing to a bearish outlook.

🌍 FII Activity – Continuous Selling

FIIs have been selling heavily for the last two months:

₹47,000 crore sold in July
₹46,000 crore sold in August
Despite positive GST news, they have already sold ₹6,000 crore in just a few days of September

Three Main Reasons for FII Selling:

US bond yields have risen
→ Safer, better returns compared to risky equities
Rupee depreciation
→ Rupee has crossed ₹88 per USD, leading to currency conversion losses
Other markets are performing better
→ Possible portfolio rebalancing

💰 Warren Buffett Is Sitting on Cash

Even Warren Buffett, known for long-term investing, is cautious:

Currently holds $277 billion in cash
Possibly believes:
- Market is overvalued
- Crash is likely, waiting for better valuations

His famous quote applies here:

“Better to sit on cash than overpay in uncertainty.”

🇺🇸 US Economy Weakening

According to recent Federal Reserve data:

Only 22,000 jobs added in August
Unemployment rate: 4.3% (highest in recent times)

This could lead to rate cuts, which may be positive for markets, but:

Decision expected around 16–17 September
Market is highly dependent on this
If there’s no rate cut (or <50 bps), markets may react negatively

💸 Rupee Depreciation – Big Red Flag

The fall in the value of the Indian Rupee is a major concern:

FIIs face conversion losses when repatriating funds
Crude oil import costs increase
Inflation risk goes up, affecting the economy

🛢️ Crude Oil Prices on the Rise

Current crude oil price: $66.87 per barrel
This is slightly above average
If prices rise further:
- Dollar demand increases
- Rupee weakens further
- Inflation rises
- All of which are bad for the stock market

📅 September–October: Historically Volatile

These two months are historically unstable for Indian markets
FII portfolio rebalancing leads to increased selling pressure
Also, since Q2 ends in September:
- Investors may book profits before quarterly results
- Helps avoid surprises or sharp declines post-results

🤔 Final Thoughts

After knowing all these things, what do you think?
How will our stock market perform in September?

Let us know in the comments below!

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