Estimated reading time: 7 minutes
Key Takeaways
- September’s so-called “curse” is broken as the S&P 500 posts a 2.7% gain month-to-date.
- Mid-week interest-rate cut by the Federal Reserve fuels broad-based rally.
- Technology and small-cap stocks emerge as primary performance drivers.
- Total return including dividends outpaces price gains by roughly 1-2% annually.
- Historical data suggest continued upside potential through year-end 2025.
Table of contents
Current S&P 500 Gains and Losses Breakdown
Through 19 September 2025 the S&P 500 added 32.40 points to close at 6,664.36, notching a 0.21% daily rise and lifting month-to-date performance to 2.7%. Historically one of the weakest months for equities, September now finds itself on the bullish side of the ledger—a move largely credited to the Fed’s surprise 25-basis-point cut.
Technology bellwethers such as Apple and semiconductor names spearheaded the advance, while smaller-cap sectors echoed that optimism, hinting at broad participation rather than narrow leadership. Sectors contributing to losses remain few, underscoring underlying market strength.
“When virtually every sector rallies in tandem, it tells you liquidity is abundant and sentiment is turning risk-on,” observed one Wall Street strategist.
Stock Market Performance Across Major Indices
The Dow Jones Industrial Average closed at a record 46,315.27, while the Nasdaq advanced 0.42% on 19 September. Small-cap strength was even more pronounced: the Russell 2000 printed fresh all-time highs, highlighting minimal performance disparity across market segments.
- Advancers outnumber decliners nearly 3 to 1 on major exchanges.
- Volume remains robust, rebutting concerns of a low-liquidity rally.
- Macro tailwinds—including Fed policy—continue to synchronise index trajectories.
Historical S&P 500 Returns in Context
Since 1950, years featuring a positive September for the S&P 500 have produced an average 15% gain over the following 12 months. The current 2.7% rise ranks among the decade’s strongest September showings, suggesting fundamental rather than technical drivers at play.
Periods of coordinated central-bank easing—1995, 2019—historically ushered in multi-quarter bull phases. If history rhymes, investors could witness a similar pattern into 2026.
Bull vs Bear: Current Market Classification
With gains exceeding 30% since April lows, the index comfortably meets the textbook definition of a bull market. Meanwhile, the VIX hovers near 13—hardly bear-market territory—implying confidence outweighs fear. Institutional positioning corroborates the view, as pension funds lift equity allocations for the third straight month.
S&P 500 Total Return Including Dividends
When dividends are factored in, the index’s total return eclipses price performance by roughly 1-2% annually. Dividend reinvestment, long touted by academics, compounds gains—vital for retirement portfolios seeking both growth and income.
Notably, blue-chip constituents have raised payouts in tandem with earnings, keeping yields attractive even as prices climb.
Market Cycles & Current Trends
Cycle analysis indicates an expansionary phase: moderate volatility, sector rotation into growth, and accommodative policy. The rally’s six-month duration still sits within average expansion timelines, leaving room for further upside before any meaningful correction.
Long-Term Growth Prospects
Looking beyond 2025, AI adoption, automation, and continued policy support underpin optimistic earnings forecasts. Analysts project double-digit EPS growth into 2026, with balance-sheet strength enabling buybacks and increased dividends. Investors pursuing total-return strategies remain well-positioned.
Monthly Returns Overview & Patterns
2025 has delivered gains in five of six months since April, showcasing rare consistency. While September usually challenges markets, this year’s positive print underscores broad economic resilience and could foreshadow a strong fourth quarter.
FAQs
Why is September traditionally weak for stocks?
Seasonal factors—tax-loss harvesting, end-of-summer trading lulls, and fund rebalancing—often pressure equities, giving rise to the “September curse.”
What drove the S&P 500’s September 2025 rally?
A surprise Fed rate cut, robust tech earnings, and improved investor sentiment combined to fuel the advance.
Is the current rally sustainable?
Historically, broad-based rallies supported by monetary easing often persist; however, investors should brace for periodic pullbacks.
How important are dividends to total return?
Dividends typically add 1-2 percentage points to annual returns and dramatically enhance compounding over multi-year horizons.
Could a policy shift derail the bull market?
Yes. An unexpected tightening cycle or fiscal shock could temper enthusiasm, but current Fed guidance remains accommodative.
