Market Crashing? I don't think so. September 2026

[antwerks]

Market Crashing? I don't think so.

SPY fell only 0.38%, while QQQ and IWM finished positive. In a developing crash, correlations normally move toward one—large caps, technology, small caps, credit, and breadth begin falling together. That did not happen Friday. This was selective selling rather than indiscriminate liquidation.
The immediate catalyst was stronger employment, not rebalancing. August payrolls increased 162,000 versus approximately 56,000 expected, while unemployment remained 4.1%. The market interpreted “good economy” as potentially bad for interest rates: expectations for a September rate increase reportedly rose to about 58%. BLS employment report, Reuters market recap

Where my explanation needs a tightening​

• • Inflation is not yet settled. The newest August PPI and CPI reports have not been released. PPI arrives September 10 and CPI September 11. Therefore, the market is trading the uncertainty surrounding those numbers—not confirmation that inflation remains neutral. BLS release calendar
  • The 10-year remains a potential problem. Even though it backed away from its intraday high, it recently approached 4.8%. The direction over several days matters more than one afternoon decline. Persistent yields near or above that area would pressure valuations, particularly expensive growth stocks.
  • September rebalancing is real, but it does not fully explain Friday. SPMO is the momentum fund you are probably thinking about. It reconstitutes and rebalances twice yearly on the third Fridays of March and September. Invesco SPMO methodology This year that September event is still ahead, so positioning may begin early, but the actual forced trading has not happened yet.
  • “Dealers taking profits to make year-end look good” mixes different participants together. Portfolio managers may realize profits, reduce crowded holdings, or reposition ahead of reporting periods. Dealers generally hedge the option and inventory exposure created by customer orders; they do not ordinarily manage books to make annual fund performance look attractive.

Structure–Location–Behavior assessment​

Structure: The broad market remains in its established bullish trend. One mildly negative S&P session does not alter that.
Location: Valuations are elevated, yields are high, and the market is entering a seasonally volatile period. That creates correction vulnerability even without a recession.
Behavior: Positive QQQ and IWM performance alongside a slightly negative SPY suggests rotation beneath the index—not systemic liquidation.
Risk: The situation becomes materially more dangerous if SPY loses its daily 50-day average, failed rebounds form lower highs, breadth deteriorates, credit spreads widen, and volatility remains elevated rather than immediately fading.
Objective: As long as those breakdown conditions do not appear, weakness is more likely to become a tradable pullback, consolidation, or sector rotation than a crash.

My present judgment​

• • Immediate crash: Low probability
  • Ordinary 3%–5% correction: Meaningful probability
  • September volatility around CPI, the Fed, options expiration, and SPMO/index rebalancing: High probability
  • Bull trend continuing after the volatility: Still the base case

The unspoken risk is that markets frequently fall without one spectacular headline. A crowded market, high valuations, rising yields, and deteriorating breadth can become their own catalyst. So “there is no major catalyst” supports caution against predicting a crash, but it is not enough by itself to rule one out.
For now, I would call this bullish structure under increasing rate and positioning pressure—not a confirmed crash setup.

 

[El Kabong]

Predictions are hard! Especially about the Future! - Yogi Berra
I have been involved in the markets since 1987. For what it's worth, my take from 20,000 feet is: (1) Watch the bond market. It is a LOT bigger than the stock market. A 4.8% 10 yr is concerning. In 1987, the 30 yr bond rose to 9.5% in the preceeding 6 months before the crash in October. Rising bond yields are never good. (2) The second year of a presidential term is usually the worst year of the four. The market will err on the side of caution until the mid terms work themselves out. (3) History shows that September is the worst month of the year. November and December are some of the best. The 15 months after September are usually the best time of the 4 year term. Good luck to all!

 

[merryDay]

one person's humble opinion

Volatility vs Trend

Oh my yes! We have volatility catalysts piling up.
Supply side Treasury auction digestion driving ~4.8% yields, currency interventions supporting the Japanese Yen, hot inflation prints, hawkish central bank commentary, seasonal September chop, and index rebalancing.

Do not confuse volatility with trend.
There are no notable interruptions to the current bull trend on the horizon.
And as day traders, this volatility is what drives our trades!

You cannot compare today’s ~4.8% yield environment to historical crash eras.
The underlying math does not support it.
In the 1980s, Paul Volcker intentionally starved economic demand by pushing rates past 19%; today’s rate pressure is a function of sovereign debt absorption, not an intentional crushing of enterprise growth.

Look at the market's fundamental driver of equity growth: corporate earnings power.
There is no crash setup.
Look no further than Nvidia’s recent guidance: management explicitly stated that the only speed bump capping their top line growth at 70% instead of 100% or more is a physical supply constraint. Their end market demand is effectively uncapped.

The order books and capital deployment pipelines across the entire AI and infrastructure ecosystem are obscenely deep, stretching out to 2030.

Are there massive operational bottlenecks in power grids, data center execution, and geopolitics?
Absolutely. And yes, these will further feed the volatile market action.
But these are physical scaling hurdles, not structural economic breakdowns.

Sadly, higher rates and elevated energy costs are real burdens, particularly for stretched consumers and fixed income populations.
But for market leading enterprise balance sheets generating gross margins above 70%, macro friction is simply an accepted cost of doing business.
We have never seen multi year demand visibility and guidance this strong in modern market history.

Is there volatility ahead? Yes, lots!
High valuations, yield spikes, and massive corporate debt issuance to fund this historic capex revolution creates a demand of perfection.
When the nervous nelly trading desks don't get it, the algorithms go into overdrive triggering violent rotations, and as day traders, we have to be careful not to get caught in the chop.

But volatility does not break a structural bull market built on guaranteed order books.

FYI, this post complements and agrees with @antwerks and @El Kabong.
Yes, September Correction can be from 3-10% to the down side.
Yes, midterms add to that volatility.
Yes, a santa claus rally after everything shakes out; is alway a hoped-for outcome.