The market is soon entering a period in which there historically have been no moves to the upside on average. Data from Wolfe Research this week finds that the S & P 500's monthly total return for August and September since 1990 has averaged a decline of 0.3% and 0.7%, respectively. That's in stark contrast to July and the succeeding months October, November and December, all of which have seen an average gain of at least more than 1%. Stocks have been roaring higher, bolstered by strong quarterly results from companies such as Alphabet . The broad market index notched its fifth consecutive closing record on Friday and finished above 6,300 for the first time last Monday. The S & P 500 is currently on pace for a nearly 3% jump month to date, almost double the historical average return of 1.5% for July. Year to date, the index has risen more than 8%. "As markets continue to hit new all-time highs, we expect to see a consolidation post earnings season as stocks enter into a historically weaker period," Chris Senyek, chief investment strategist at Wolfe, wrote in a note dated Tuesday. .SPX mountain 2025-07-01 S & P 500, month-to-date A more hawkish signal from the Federal Reserve at the end of its two-day policy meeting Wednesday may increase this consolidation, Senyek said. Fed funds futures traders largely expect the central bank to keep its benchmark overnight borrowing rate steady in a range of 4.25% to 4.5%, per CME's FedWatch Tool . "With the growth outlook for the U.S. remaining solid and tariff policy working its way through to consumer prices, we expect the FOMC to hold rates steady at this week's meeting," he wrote. "Our sense remains that the biggest risk to stocks in the back half of the year is stickier inflation keeping rates much higher than the futures market currently expects!" Alongside the Fed, the strategist believes a weaker-than-expected nonfarm payrolls reading for July on Friday, signs of sticky inflation in the wake of Thursday's personal consumption expenditures price index report and disappointing earnings reports and spending expectations for artificial intelligence-related stocks could serve as catalysts. Semiconductor company Qualcomm and "Magnificent Seven" companies Meta Platforms and Microsoft are all set to report Wednesday after the bell. Others such as Amazon and Apple are slated for Thursday.
