The S&P 500 slipped Monday after the U.S. and Iran traded strikes for the first time in a month, even as the index heads into September having gained more than 2% in August. Traders are now watching that seasonal handoff closely — September has been the worst-performing month for major U.S. indices for decades, and this year it also carries a midterm-election backdrop and a hot inflation reading.
Iran strikes and an oil spike weigh on Monday's session
The S&P 500 fell Monday after the U.S. struck targets on Iranian Larak Island. Iran fired at U.S. targets in Jordan in the first exchange of strikes between the two countries in over a month. West Texas Intermediate crude hit a high of $86.79 per barrel on Monday, the highest level since Aug. 21, when WTI traded at $87.51.
Nvidia and CrowdStrike buck the broader decline
Nvidia still advanced more than 1% after announcing a $3.5 billion investment in chip designer MediaTek. That gain follows a rougher Friday, however: Federal Reserve Chair Kevin Warsh's Jackson Hole speech, where he suggested interest rates may need to rise further, sent Nvidia shares down 4.5%. CrowdStrike, meanwhile, gained 4% after a post from AI podcaster Dwarkesh Patel that reinforced the case for heavier enterprise cybersecurity spending.
August's gains meet September's track record
The S&P 500 hit multiple all-time highs in August, with the index up more than 2% and the Dow over 1% for the month. But September ranks as the worst-performing month across major U.S. indices going back decades, according to the 2026 Stock Trader's Almanac: the Dow has shrunk an average of 0.8% in Septembers since 1950, the S&P 500 by 0.7% over the same span, the Nasdaq Composite by 0.9% since 1971, and the Russell 2000 by 0.8% since 1979.
This year also brings U.S. midterm elections in November. Roth chief technical strategist JC O'Hara wrote in a Sunday note to clients: "Mid-term election years have historically brought volatility in September and October." He added that rotation into sectors that lagged in the first half of 2026 reflects defensive positioning heading into the fall.
Profits climb as inflation stays above target
Behind August's rally, pre-tax corporate profits jumped to $4.8 trillion in the second quarter, or 18% of national income — the highest share since at least 1950. At the same time, the personal consumption expenditures price index rose 3.7% in July, close to double the Federal Reserve's 2% inflation target, though off a recent high of 4.1% in May.
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