September put the equity rally under real strain, according to the latest monthly equity review from trading platform Exante.

Rising sovereign yields, firmer inflation expectations and policy uncertainty forced investors to separate companies with resilient earnings from those most exposed to higher rates.

The divergence between US benchmarks was stark. Exante’s analysis shows the S&P 500 slipped 0.45% while the Nasdaq 100 climbed 3.23%. Nine of the eleven S&P 500 sectors finished lower, and leadership narrowed sharply around Information Technology and Communication Services. Elsewhere, the Dow Jones Industrial Average fell 4.29% and the small-cap Russell 2000 dropped 5.40%.

Beneath the headline numbers, market breadth deteriorated significantly. Exante found that the S&P 500 outperformed its equal-weighted counterpart in 15 sessions, or 72.7% of trading days, the highest proportion since June 2025. The market capitalisation weighted index beat the equal-weight index by 5.44%, the widest margin since March 2020. New 52-week highs outnumbered lows in just two sessions, on 2 and 3 September.

By month end the picture had weakened further. Only 22% of S&P 500 constituents were trading above their 50-day moving average, the lowest share since March 2026, while 39.8% sat above their 200-day moving average, the lowest since March 2025. The equal-weighted S&P 500 fell 4.99%, underperforming the benchmark by 4.54 percentage points, and now trails it by 2.89 percentage points year-to-date.

Europe offered little relief. 49%, its first monthly decline in six months after reaching a record high in August. Fifteen of seventeen sectors declined, with the DAX and CAC 40 the weakest major indices.

Source link