September has historically been a challenging month for U.S. equities, and Yardeni Research cautioned that this year could bring renewed volatility, even as broader markets remain resilient.

The firm noted that the S&P 500 may have already reached a recent high of 6,501.86 in August. Despite Nvidia posting strong results, neither its shares nor the wider market saw sustained gains in the following days.

Yardeni suggested that recent declines may reflect profit-taking ahead of the holiday weekend rather than the start of a bear market, with investor sentiment still relatively muted.

The note outlined several factors that could pressure stocks in September. Chief among them is the Federal Reserve’s policy stance. While markets anticipate a high probability of a rate cut at the Sept. 17 meeting, Yardeni argued that easing is unlikely given strong consumer spending, rising wages, and robust GDP growth. Inflation, particularly in the services sector, has also firmed in recent months.

The firm added that the Fed’s independence has been challenged by President Donald Trump’s attacks, adding uncertainty to future policy decisions. Meanwhile, Trump’s tariffs face legal hurdles: an appeals court deemed many measures unlawful but allowed them to remain in place until mid-October pending appeals.

International headwinds were also highlighted, including political instability in France, Germany’s manufacturing recession risks, and rising Japanese bond yields.

Given these uncertainties, Yardeni suggested gold could climb toward $4,000 an ounce by year-end as investors seek safe-haven assets. Still, the firm noted that historically weak Septembers often create buying opportunities for rallies into year-end—a pattern that could repeat if near-term pullbacks prove temporary.

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