September's Historical Curse and the Current Market Landscape: September is historically the weakest month for the US stock market. Historically, the S&P 500 has averaged a -0.7% return in September since 1950, significantly lower than in other months. This is no coincidence, driven by a combination of seasonal factors, post-holiday fund inflows, and quarter-end rebalancing. Long-term market observers may already be familiar with this "curse." At the end of August 2025, we are at a critical turning point: top tech stocks are losing momentum, while anti-inflation assets like gold and silver are experiencing a strong breakout. Meanwhile, Bitcoin is showing signs of a crash, which some see as the market's "canary in the coal mine"—an early warning sign. This week's market was bleak, particularly as tech giants saw panic selling following Nvidia's in-line earnings report, which met expectations. As of August 30, 2025, the S&P 500 closed at 6,460.26, down 0.64%. The Nasdaq Composite Index closed at 21,455.55, down 1.15%. The Russell 2000 Index of small-cap stocks performed relatively well, indicating a rotation from large-cap technology stocks to value and small-cap stocks. This phenomenon is not isolated, but rather reflects a confluence of macroeconomic factors, Federal Reserve policy, and global geopolitical factors. This article, based on the latest data, will provide an in-depth analysis of the dynamics of the stock, commodity, and crypto markets, and explore potential risks and opportunities in September. Gold and Silver: A Strong Breakout for Anti-Inflation Assets Let's start with precious metals, the current market's brightest sector. Gold has broken out of a long-standing wedge pattern, demonstrating strong upward momentum. As of August 29, 2025, gold prices opened higher, with market capitalization reaching $23.611 trillion, a daily increase of 1.20%. This breakout was no accident; it was driven by structural shifts in central bank reserve allocations. Foreign central bank gold holdings exceeded U.S. Treasury bonds for the first time since the 1990s. In the second quarter of 2025, global central banks purchased 166 tons of gold, a year-on-year increase of 41%. BRICS countries (such as China and Russia) are leading this trend, with the People's Bank of China quietly increasing its gold holdings significantly from late 2024 to 2025. This shift stems from the "currency wars": the BRICS countries are developing new blockchain-based payment systems, potentially using gold as an anchor asset to challenge the US dollar's hegemony. Looking back at the 1970s and 1980s, central banks saw a sharp increase in the proportion of gold in their reserves, driving gold prices soaring. While gold prices have reached relatively high levels, historical valuations suggest there is still room for further growth. Using the 1970s peak as a benchmark, gold is far from reaching its peak. The latest weekly chart shows gold prices firmly above $3,450, with a short-term target of $3,600 or even higher. Readers may wish to consider: How high could gold prices rise over the next 12 months? Based on cyclical analysis, I predict a rise to at least $3,800. Silver's performance was even more impressive, breaking through the $3,950 mark to establish a new high. The weekly gain was significant, with a monthly increase of 30-40%. Silver's strength stems from a recovery in industrial demand, particularly driven by rare earth and metal tariffs. Since 2025, the United States has imposed higher tariffs on rare earths, leading to a reshaping of the supply chain and a surge in prices. The Rare Earths Monthly Metals Index (MMI) rose slightly by 0.37%, but the surge in medium and heavy rare earth prices was driven by major manufacturers. The prices of elements such as terbium and dysprosium have soared, and supply constraints have exacerbated market differentiation. As a representative of industrial metals, silver has benefited from this, with a target price of $42-43, well below the 2011 peak of $50. Dark pool trading data further confirms this trend. Last week, GLD (gold ETF) recorded its largest dark pool trading volume ever, signaling a shift in capital inflows. This isn't speculation, but rather a safe-haven position by institutions against inflation and a weak dollar. Overall, commodity valuations are historically low: the commodity index remains "ridiculously cheap" compared to stocks. If the new BRICS currency is established in 2026, gold and silver will benefit further. Overall Commodity Valuations: Opportunities at Historical Lows. Expanding to the broader commodity market, valuations in 2025 appear extremely undervalued. Rare earth demand is strong, driven by applications in permanent magnets, but growth has fallen short of expectations. Neodymium prices reached 785,000 yuan per ton, a monthly increase of 20.31%. Historical comparisons show that current commodity prices are similar to the cyclical lows of 2005-2007 and well below the peak of the 1970s. The tariff war has exacerbated this dynamic: the Sino-US trade friction has caused prices of rare earth metals and other metals to rise by 30-40%, but overall commodities remain cheap. The same is true for energy commodities. While oil prices fluctuate, energy stocks have a solid foundation and benefit from stagflation expectations. Recent data shows that the energy sector is attracting smart money. Compared to technology stocks, commodities offer a better value buffer, especially during a Federal Reserve rate cut cycle. Stock Market Rotation: A Shift from Tech Giants to Value Stocks Market rotation is a core theme today. In the past five years, four saw sell-offs in September, with another leading to an early correction in August. The same pattern holds true for 2025: Top stocks like Palantir and Magnificent 7 (Apple, Amazon, etc.) drove gains in the first half of the year, but momentum began to falter in mid-August. While Nvidia's stock price rose 5.82%, the broader tech sector came under pressure. Tesla fell 6.8%. This decline revitalized a rotation: value stocks, equal-weighted indices, and healthcare saw improvements. The Russell 2000 rose 7% in August, marking its fourth consecutive month of gains, similar to the post-2020-2021 cycle. Since March 2021, the S&P 500 has outperformed the Russell 2000, but small-cap stocks are more attractively valued: the S&P's price-to-book ratio is 5.0, while the Russell's is only 1.8. Since August, the Russell 2000's significant outperformance of the S&P indicates a shift in the tide toward small-cap stocks. Historically, the Russell 2000's September decline is smaller than that of the Nasdaq, S&P, and Dow Jones Industrial Average. The Russell 2000 experienced strength in the second half of the year: November and December have historically been strong months. If the rotation continues, it could reach nine months of gains. Smart money favors healthcare, industrials, and energy over information technology. Healthcare's forward P/E ratio of 18.2 is significantly lower than the tech sector's 37.1, providing a valuation buffer. Industrials benefit from infrastructure, while energy is buoyed by stagflation expectations. This rotation does not signal the end of the market, but rather a broadening of a "pit" or pullback. If more stocks participate, it would be considered positive. The Fed's rate cut reinforces this trend: the market is pricing in a 25bps rate cut in September, with more expected within 3-6 months. The S&P median performance after the rate cut is negative in the short term, but positive for the rotation in the long term. High-yield bond spreads are at historically low levels, similar to the pre-calm period of 2005-2007. The second half of the post-election year will be stable, but sideways fluctuations are common. If the market moves sideways after the rate cut, small- and mid-cap stocks may lead, while large-cap stocks will lag. Dark pool activity is high: Nvidia, Oracle, and Nvidia saw large transactions. Ethereum saw significant inflows, indicating accumulation. Selling pressure is possible after Labor Day, but may resume after digestion. Bitcoin and Crypto: A Bear Trap in the Cycle? Bitcoin is attracting attention: down 7% from its February high, currently around 108 (index level). It sometimes outperforms the stock market, with strong correlation this year. The halving cycle suggests a "bear trap" phase in 2024-2025: dips are common after the halving, followed by an eventual bull run. Historical analysis shows that the current price is similar to past cycle lows, potentially leading to a 20%+ correction followed by a rebound. Altcoins are holding steady: Solana, XRP, and Ethereum are outperforming Bitcoin. Bitcoin's dominance rate fell from 65% in July to 59.7% in mid-August, prompting a shift in funds toward altcoins. Altcoin season typically begins between June and September after the halving and lasts for 30-40 days. FOMO among junk coins has yet to be seen, suggesting the bull market is not over. Prediction: Bitcoin will rise first, triggering the altcoin season, with a target of $150,000-185,000. Crypto and stock market interconnection: Bitcoin's risk appetite is waning, but its internal performance is stable. The US dollar is range-bound, trending downward.
Technical Signals and Key Levels
S&P 500: Advanced recession line rising, not a bear market. Prices are not bearish, with a new high at 6350 and support at 6200. Futures are similar. Nasdaq: Weak, no new highs, resembling a head-and-shoulders pattern.
Technical Signals and Key Levels
S&P 500: Advanced recession line rising, not a bear market. Prices are not bearish, with a new high at 6350 and support at 6200. Futures are similar. Nasdaq: Weak, no new highs, resembling a head-and-shoulders pattern.
Technical Ratio 445: Resistance. Tesla: Support at 330, call wall at 350, if broken, 380-400. Nvidia: 170-185 range, breakout to gain distance. Russell 2000: Pushing towards 2450. Bitcoin: Low-high sequence, target 104-105, or a 21% retracement. Gold: Strong weekly performance, target 3600. Silver: New highs, short squeeze potential. Chinese market: Driven by central bank liquidity, 42% increase, similar to 2006-2007. Macro Outlook: The Federal Reserve, Employment, and Risks. Tuesday's PMI and employment data are key. Employment revisions may boost the market. Fed Chairman Powell hinted at a September rate cut, but with caution. If a recession occurs, the structure is: sideways, favoring small-cap stocks. Risks: Low volatility, spike, and concerns about an AI bubble. Opportunities: Rotation, commodities.
Conclusion: Strategic Layout and Outlook
Although September was weak, rotation broadened the market base. Prioritize commodities, gold and silver, small-cap stocks, healthcare, and energy. Bitcoin may rebound after its trap. Based on data, the second half of 2025 is optimistic, but be wary of negative consequences after interest rate cuts. Over the next three to six months, observe winners and adjust positions.
Catherine
Anais
Weatherly
Kikyo