Executive Summary
Global markets start September on a cautious note after a summer rally, as investors brace for traditional seasonal volatility, critical economic data, and mounting macro risks. US growth data surprised to the upside last week, but September is historically challenging for equities, crypto, and risk assets as policy, profit-taking, and geopolitical headlines stack up.
Recent Data & Market Developments
US Economy
GDP Growth Surged in Q2:
US real GDP grew at an annualized rate of 3.3% in Q2 2025, notably higher than Q1’s -0.5% contraction. The upturn was driven by a rebound in consumer spending and lower imports, offsetting weak investment and exports.Core PCE Inflation:
The Fed’s preferred inflation measure rose 0.3% MoM and 2.9% YoY, matching expectations and keeping the door open to a September rate cut despite sticky price pressures.
Global Market Sentiment
Equities:
US stocks hit all-time highs in August, but Fridays’ small declines highlight traders’ caution heading into September. The S&P 500 futures were steady overnight; European and Indian equity futures indicated firmer openings todayBonds:
Treasury yields remain elevated as major sovereigns (US, Europe, Japan) plan large bond sales, testing investor demand amidst deficit and supply worries.FX:
The dollar remains firm against major peers; China’s CSI 300 is at decade highs amid capital flowing out of bonds and savings into domestic stocks.
Key Macro Risks for September
Seasonality:
Since 2020, the MSCI World Index has averaged a nearly 4% decline in September. US and global equities tend to underperform during the month, with “Red September” a recurring theme for both stocks and bitcoinProfit Taking & Rotation:
With August’s gains, mutual fund managers and large institutions often rebalance, triggering a wave of sell orders, especially in tech and high-beta playsTrade & Geopolitics:
US-China and US-India tariff tensions remain in focus, as the US announced fresh 25% duties on Indian imports while extending negotiations with China. Markets are watching for new headlines disrupting supply chains or softening global trade.Bond Issuance:
US, Japan, and Germany kick off major bond offerings early this month—yield spikes or weak auctions could spill into risk assets.
Cross-Asset Outlook
Asset | Short-Term Outlook | Notes |
|---|---|---|
Equities | Cautious/volatile, risk of pullbacks | Watch tech, cyclicals for rotation |
Bonds | Volatility up, auctions a key test | Supply > demand could mean higher yields |
Gold | Strong YTD (+30%), near record highs | JP Morgan sees $3,675/oz average Q4 |
Crypto | Cautious, prepping for “Red September” historical selloff | Bitcoin tends to drop ~4% on average in September |
Commodities
Gold:
Surged 30% YTD, now trading just below $3,500/oz. Demand is sustained by central banks and as a hedge against policy/geopolitical risk. Projections call for strength into Q4, with $3,675/oz average price and a $4,000/oz target by mid-2026Oil:
Treading water near $67/bbl; supply/demand tension and geopolitics (tariffs, Ukraine) remain dominant factors.Other:
Industrial metals ebb with Asian data. Agriculture outlooks remain weather and policy dependent.
Crypto Markets
Bitcoin:
Trading sideways after a late-August stall—currently just above key support near $110,000. September has averaged a 3–4% decline for BTC since 2013, heightening volatility risk ("Red September" narrative).Systemic Risk & Contagion:
Recent academic work highlights that systemic risk within crypto increases sharply during tail events. Protocol-level transparency and liquidity management are vital for resilience
The Week Ahead
US Labour Day:
US markets closed Monday for the holiday—expect low volume.Key Data/Events:
US jobs data (ADP, Challenger, NFP) and jobless claims (Thurs-Fri)
Global PMI, European and Asian inflation/industrial data
Major bond auctions (US, Japan, Germany)
Macro Watch:
Will bond markets absorb government supply smoothly? Will stocks and crypto see the usual September pullback or do macro tailwinds (growth, policy) provide support?
Conclusion
The summer rally faces its first major hurdle as September opens with stacked risks: seasonal volatility, big bond supply, and sticky inflation. Defensive bias and tactical hedges are warranted. Watch for rotation, profit-taking, and the potential for macro-driven shocks as traders return from summer break.
Key risk: September’s historical weakness and new policy/geopolitical shocks.
Key opportunity: Gold’s resilience, tactical positioning in quality equities and income-generating assets.
Risk Disclaimer: This analysis reflects current market conditions as of September 1st, 2025. Rapid changes in economic data, geopolitical developments, or central bank communications could materially alter the outlook. Diversification and appropriate risk management remain essential in the current environment. None of this is financial advice, Wizard Macro Research cannot be held responsible for any losses