• Major indices continue their September slide, with the S&P 500 down 0.4% and the Nasdaq Composite falling 0.8%.
  • The declines extend a period of heightened volatility originally triggered by aggressive US trade policies and subsequent global economic uncertainty.
  • Seasonal headwinds, known as the 'September Effect,' are compounding policy-driven market swings during a historically weak month for equities.

US equities extended their decline in afternoon trading Thursday, with the S&P 500 last down 0.4% and the tech-heavy Nasdaq Composite falling 0.8%. The moves continue a choppy session and reflect the persistent volatility that has characterized markets through much of 2025.

The selling pressure builds on prior losses following a period of instability that began in April, when new US tariffs triggered the largest two-day loss in S&P 500 history and sent volatility measures to their highest level since the COVID-19 crisis. While stocks staged a significant rebound into late June as some tariffs were paused and initial trade agreements were reached, the underlying uncertainty has proven difficult to shake.

Traders and portfolio managers cited the convergence of macro concerns and seasonal factors. “You have the structural overhang of trade policy and then you layer on the typical September rebalancing and tax-loss harvesting,” said one senior trader at a major investment bank, who asked not to be named as he was not authorized to speak publicly. “It creates a feedback loop of selling.”

Indeed, the 'September Effect' is a well-documented seasonal anomaly. Since 1928, the S&P 500 has averaged a decline of 1.2% for the month and has ended September lower 56% of the time, often due to institutional portfolio repositioning.

The current market environment has been directly shaped by executive orders and tariff policies, which have strained trade relations and disrupted global supply chains. Retaliatory measures from key trading partners like China have added another layer of complexity and risk, keeping investors on edge despite underlying economic strength supported by robust consumer spending and earlier interest rate cuts from the Federal Reserve.

The broad-based nature of today’s decline suggests the concerns are sector-agnostic, though technology names, which are more sensitive to global trade flows and growth expectations, are bearing the brunt of the selling. Attempts to reach officials at the White House for comment on the market reaction were not immediately successful.

For now, traders are bracing for more turbulence. The CBOE Volatility Index (VIX) remained elevated, reflecting expectations for further swings. The short-term outlook remains heavily contingent on the next developments in trade policy, with many investors adopting a cautious stance until a more durable framework emerges.