September 2024 was a month of continued market momentum, with global equities maintaining their upward trajectory. The global stock index rose by 2.3%, as the Federal Reserve began its easing cycle with a larger than expected rate cut of .50%. This marks the fifth consecutive month of stock market gains, reflecting a resilient market despite underlying economic uncertainties and increasing geopolitical tensions.
Despite a rocky start to the month, the S&P 500 continued its positive performance, gaining 2.1% for the month and 22.1% year-to-date. Large cap growth and technology stocks returned to leadership this month over large value and smaller stocks. Foreign developed markets also saw modest gains, up 1.0%, while emerging markets posted a noteworthy increase of 6.7%. This jump was attributed to the astonishing 23.9% gain in the Chinese stock market after authorities released an extensive monetary and fiscal stimulus package late in the month.
Bond investors also saw positive returns, with the U.S. Aggregate bond index rising by 1.3%. The treasury yield curve became "uninverted" this month as the 2-year treasury yield fell below the 10-year yield for the first time since July 2022, thanks to the Federal Reserve's rate cut. Additionally, gold set new all-time highs with a 5.9% increase in September, while oil prices reached their lowest levels of the year.
The major news in September was the Federal Reserve’s 0.50% rate cut, which was larger than expected. Fed Chair Jerome Powell noted inflation is nearing their 2% goal while the labor market is softening. Inflation fell to 2.5% from 2.9% last month, its lowest since early 2021. Job growth also slowed, with 142,000 new jobs versus the forecasted 161,000. The Fed suggested more rate cuts may come by year-end to boost economic growth.
Geopolitical tensions flared up further in September, with hostilities in the Middle East spreading to Lebanon despite repeated calls by Western nations for a ceasefire. At the same time, Russian President Vladimir Putin continued to threaten escalation, particularly if Ukraine was allowed to use long-range missiles to strike Russian targets. The increased tension added another layer of uncertainty to global markets, although the impact remained contained for the moment.
Overall, September 2024 was a month of significant developments in both the stock market and the broader economy, with key policy decisions and economic data shaping investor sentiment and market performance.