Stock Talk - A September to Remember: 21 Trading days. Stock Market Update, Friday October 10, 2025

Episode Date: October 10, 2025

Maybe five or ten years from now, we’ll look back and wonder if September 2025 was the top of the AI boom. Personally, I doubt it. For now, those who tuned out the “AI bubble” and “overvalued S&P 500” chatter are likely smiling after a strong third quarter.   Today I'm going to review the data and context behind what may go down as one of the strongest third quarters in recent history, and discuss why, historically, the fourth quarter often adds to those gains. We’ll look at sector performance, volatility (or the lack thereof), and how market seasonality, the presidential cycle, and past patterns like the late 1990s can help frame expectations heading into year-end.   I also share thoughts on how investors can interpret strong markets responsibly with a focus on data, discipline, and perspective, not hype or prediction.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy — with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free consultation: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, we're back to our data-driven approach here at O'Carvis, and maybe five or ten years from now, investors will look back and cry about the 21 trading days in September 2025 as the top in the AI bubble. Doubt it'll be the case that September 2025 marks the top. For now, investors who have ignored the widely communicated AI is just a bubble, the S&P 500 is overvalued for the last 18 to 24 months, are singing happily after 21 trading days. of September, completed a very strong third quarter. I hope you're smiling as you review your third quarter brokerage and 401k statements if you had a heavy allocation to stocks both internationally, the S&P 500, and domestic large cap growth stocks. As of October 3rd, here is the ranked

sector performance on a three-month training basis as calculated by fidelity investment. Investors, this was near a historic third quarter for stocks, particularly the combined returns of August in September, which historically amount to nothing net over the two months with August, usually being up with most years, but being erased by a down September. Here's the chart from Carson showing third quarter returns since 1970. As September is historically the worst month of the year for stocks, how off-footed were those that traded only on negative seasonals for September? Well, it was the best September in 15 years and the second best going back 27 years. great chart from Carson showing a September to remember returns for the last 55 years.

S&P 500 gained about 3.5% and NASDAQ 100 gained about 5.4% and the SMH Semiconductor index gained an astounding 12.5% on the month. On the month, not the quarter or the year, the month of September. Here are those three charts for September on those indexes. Investors, the amazing thing, not a single day closed up or down more than 1%, making it historically calm month of almost no volatility. Investors after such a strong rally, many investors may wonder if the good returns of 2025 are done. Should they tap out and call it a year? Historically, the answer is no. For ammunition on why the markets can go higher in the fourth quarter, I'm going to keep quoting Carson data here as they are very data driven and there's no reason to

recreate the wheel. The October to December period is historically the strongest quarter of the year, including the famous Santa Claus rally, which I say starts about the second week in October, not the third week in December. I mean, Santa must start writing his list early in the quarter. I mean, all those Christmas gifts have to be delivered before Christmas, not at year end. Why not invest early too? The fourth quarter gains have averaged 4.2% over the last 75 years with an 80% win rate. Here's the seasonal chart for the last 10 years. And here it is for the 10, year period ending the dot-com bubble in 2000. If you're following along since the April 2025 lows corresponding to the long-term capital management lows and early October

1998, the overlay would put us in around April of 1999 with a few more months to go in our V-bottom rally to more new all-time highs. Would this make sense now? Taini, the answer is yes. No one still gets in. The presidential cycle in investors' favor in the fourth quarter in the first year of a presidential cycle, leaning very positively, averaging 3.8% gain with a about 78% win rate. And finally, enters, remember, new all-time highs are bullish, as most financial commentators tend to discuss in tone on TV. Even more telling when September has been strong, historically, fourth quarter leans even stronger. Looking back at these historical periods, yes, they include the often mentioned dot-com bubble in the late 1990s. However,

I must point out that the corresponding times back then were not the end of the dot-com bubble, but rather mid-run-up in 96-98, not near the top, in 99, 2000. As I've discussed since mid-April, V-bottom moves and seasonal historic rallies says the rally in stocks isn't over. We've covered the data the last few months on this. Go check out our prior videos on the topic. Since we continued to mirror the same pattern back during dot-com almost to the day and week in the SP-500, I'm going to go back once again to the dot-com AI cycle overlay and look at sector performance in the second quarter of 99 through the first quarter of 2000. Recall mapping out a similar move since the V bottom low in April would project an S&P 500 target around 7200 in the first quarter of next tier and 7300 to 7400 sometime in 2026 as well.

Here's that overlay once again. It says a pause or minor pullback is likely in the fourth quarter. but it should be bought, not sold. Today, the AI buildout is leading. These relative strength groups may pause for a few weeks after their stellar September's and third quarter performance, but they will likely continue to work in the months ahead. Throwing some down-and-out health care and energy names and material names who have been beating numbers, but whose values have been cut in half by government and economic growth fears. Investors, why not be prepared in advance of the fourth quarter at 2025 to hear about the chase for performance into year end before it takes place. Investors,

if the V-bottom pattern continues in its historical path, which I expect, expect some weakness into October month end on repositioning and institutional tax selling and maybe the first few days of November, which should be bought. V-bottoms historically don't have extended or deep pullbacks in percentage terms until after the 10th or 11 month as you approach a year holding period for those investors who bought at or near the low. Regardless of the path to the economy and the financial markets in the next few months, investment team in Oak Harvest will be here. Manning the ship.

And until next week, have a blessed weekend and know the Oak Harvest team is doing what we can, playing for you and your family's teacher, regardless of what stage you're at in your career or in your retirement. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any size, at data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice.

Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment, and your investment results may differ when compared to. to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.