Crédit Mutuel AM: Is September 2026 another difficult month for markets?
By François Rimeu, Senior Strategist, Crédit Mutuel Asset Management
September has historically been one of the most challenging months for stock markets. In the current environment, what factors could confirm or challenge this seasonality, and what role could the path of government bond yields play?
For several years now, equity markets have been supported by strong nominal growth worldwide and by high margins, particularly in the US. Keep in mind that corporate earnings are ultimately a nominal quantity and over the medium term they move in step with nominal growth.
Today’s strong nominal growth, which stems from large budget deficits and the AI investment boom, is a trend that is unlikely to change fundamentally in the months ahead. Historically, inflation of between 2% and 4% has proven highly supportive for earnings. Any sign confirming that these dynamics will persist should therefore act as a support for equity markets.
High long-term yields, in both the US and Europe, are the flip side of that strong nominal growth: over the medium term, 10-year rates tend to converge towards the average nominal growth of preceding years.
September is often a choppy month, for several reasons: central bankers return after the summer lull, attention shifts to upcoming political events (i.e., US mid-terms, 2027 French elections) and bond issuance resumes after its own summer pause.
Conversely, any development that undermines the strong nominal growth scenario could be dangerous for equity markets. A higher probability of reduced US fiscal spending after the mid-terms would likely be bad news. On the other hand, positive developments in Ukraine or Hormuz would be supportive whereas further escalation could push inflation above the 2–4% zone, which would be potentially stagflationary.