Why this matters now
September just closed green for the S&P 500—historically the market’s toughest month. More importantly, 2025 delivered a fresh September high for the index. History suggests that when the S&P 500 hits a new high in September, the fourth quarter is positive in 13 of the last 14 instances, with 2018 and 1967 as outliers. Since 1950, Q4 has also been the strongest quarter on average. The setup is constructive, but not without hurdles: a potential U.S. government shutdown and a pivotal jobs report this Friday. Against that backdrop, three names stand out with compelling fundamentals and options-friendly setups heading into 2026: PayPal, AMD, and JD.com.
Quick Summary
– S&P 500: Q4 has been the strongest quarter since 1950; September 2025 finished green.
– Historical pattern: New September highs preceded positive Q4s in 13/14 cases (exceptions 2018, 1967).
– Near-term risks: potential U.S. government shutdown and an important jobs report Friday.
– PayPal (PYPL): market cap $64B; 12M -10%, YTD -18%; operating margin at a record 18.2%.
– PYPL valuation: forward P/E 12.9x vs 5-yr avg 26.9x; EV/EBITDA 8.7x vs 27.7x; PEG ~1; U.S. e-commerce 16.5% of retail vs >20% in Europe.
– PYPL options: sell Nov 21 $65 put for about $230 income per contract.
– AMD: market cap $161B; 12M -1%, YTD +34%; >100% gain from Apr 8 to end-Sept.
– AMD valuation: forward P/E 31.8x vs 35.5x; EPS growth +54% next year, +24% following; PEG 0.82; bull-flag setup.
– AMD options: sell Nov 21 $140 put for ~$415 or $145 for ~$550 per contract.
– JD.com: market cap $47B; 12M -11%, YTD +3%; revenue grew from $27.9B to $177.7B over 10 years; forward P/E 13.4x (half 5-yr avg); EPS +44%/+25%; PEG 0.4; buy Jan 16, 2026 $40 call for about $2.60.
Context and takeaways
Seasonality and breadth favor a constructive Q4, but policy risk and labor data could trigger a pullback—something that can be used to scale into high-conviction names. PayPal screens as a cheap fintech leveraged to rising e-commerce penetration with record margins. AMD offers accelerating growth, improving cash flow, and a valuation below its 5-year average—without needing to “catch” a much larger Nvidia to deliver gains. JD.com pairs a decade of significant revenue expansion with a compressed multiple; options provide exposure without full China equity ownership.
Sentiment and Themes
– Overall tone: Positive 60% / Neutral 25% / Negative 15%
Top 5 themes by emphasis:
1) Q4 seasonality and historical precedents
2) Options as income/entry and risk management
3) Valuation vs. growth (P/E, PEG, EV/EBITDA)
4) AI/semiconductor momentum (AMD vs. Nvidia scale gap)
5) China macro bottoming signals and JD.com value opportunity
September’s Green Close for the S&P 500: What It Means for Q4 2025 and Beyond
Welcome, listeners and readers, to another deep dive into the ever-evolving world of markets and finance. I’m thrilled to unpack a fascinating development in the stock market: the S&P 500 just closed September 2025 in the green, defying its historical reputation as the worst month for stocks. This anomaly, coupled with a new high in September, sets the stage for an intriguing fourth quarter. Let’s break it down, explore the historical context, and discuss what this could mean for investors moving forward, including specific opportunities and risks on the horizon.
A Historical Anomaly: September’s Unexpected Strength
September has long been the black sheep of the calendar for Wall Street. Since 1950, it’s been the month with the weakest average returns for the S&P 500, often plagued by seasonal selling, profit-taking, and pre-election jitters in certain years. Yet, here we are in 2025, with the index not only avoiding a decline but also hitting a new high. This is no small feat—history tells us that in 13 of the last 14 instances when the S&P 500 reached a new high in September, the fourth quarter delivered positive returns. The exceptions, 2018 and 1967, remind us that nothing is guaranteed, with 2018’s steep sell-off driven by Federal Reserve tightening and trade war fears.
This historical backdrop is crucial. The fourth quarter, encompassing October, November, and December, has consistently been the strongest period for stocks since 1950, often fueled by holiday spending optimism, year-end portfolio rebalancing, and the so-called “Santa Claus Rally.” Data from Carson Research highlights that Q4 returns significantly outpace other quarters, making this a period of opportunity for investors. But what does this September surprise signal for Q4 2025? Let’s dig into the factors at play.
Macro Environment: Tailwinds and Turbulence Ahead
The green September and new highs suggest underlying strength in the U.S. economy and investor confidence, possibly driven by robust corporate earnings, stabilizing inflation, or supportive monetary policy. However, as we peer into Q4, there are hurdles that could test this momentum. First, a potential government shutdown looms large, with political brinkmanship threatening to disrupt markets. Shutdowns, while often short-lived, can dent consumer and business confidence, as seen during the 2018-2019 standoff, which coincided with a sharp market drop.
Second, the upcoming jobs report, due this Friday, will be a critical litmus test. A strong report could reinforce bullish sentiment, signaling a resilient labor market and supporting further Fed accommodation if inflation remains in check. Conversely, a weak report might stoke fears of an economic slowdown, prompting volatility. Globally, we must also consider headwinds like China’s uneven recovery and geopolitical tensions in Europe, which could ripple through sectors like technology and energy.
Despite these risks, I’m cautiously optimistic. A pullback, if it occurs, shouldn’t be feared—it’s an opportunity. Markets in 2025 have been relatively buoyant with limited dips, meaning valuations in some sectors, particularly tech, are stretched. A correction could provide a healthier entry point for long-term investors, a theme I’ll revisit when discussing specific stocks.
Sector-Specific Implications: Where to Look
Let’s zoom into sectors and stocks poised to benefit—or falter—in this environment. Technology and fintech, as highlighted by picks like PayPal (PYPL) and Advanced Micro Devices (AMD), remain focal points. PayPal, with a market cap of $64 billion and trading at a forward P/E of 12.9 (well below its five-year average of 26.9), is a compelling value play in the fintech space. The growth of e-commerce, still only 16.5% of U.S. retail sales compared to over 20% in Europe, offers a long runway for expansion, especially via platforms like Venmo. However, broader market headwinds could weigh on near-term performance, making options strategies, like selling puts to buy at lower prices, a prudent approach.
AMD, a $161 billion chipmaker, is another standout. With a forward P/E of 31.8 and expected earnings growth of 54% next year, it’s a growth story in the semiconductor space, benefiting from AI and data center demand. Unlike its giant rival Nvidia, AMD doesn’t need to dominate to deliver outsized returns—just closing the valuation gap slightly could propel shares higher. Its bull flag pattern on the charts suggests potential for a breakout, though a dip to the $140-145 range could be a sweet spot for entry.
Lastly, JD.com (JD), a $47 billion Chinese e-commerce player, represents a higher-risk, higher-reward opportunity. Despite a decade of stagnant share price performance, its revenue has soared from $27.9 billion to $177.7 billion over ten years. Trading at a forward P/E of 13.4 and a PEG ratio of 0.4, it’s dirt cheap. However, China’s regulatory risks and macroeconomic challenges make it a candidate for options plays rather than outright ownership, as highlighted by the strategy of buying call options for leveraged upside with limited downside.
Global Impacts: A Connected Market
The S&P 500’s performance doesn’t exist in a vacuum. A strong Q4 could bolster global equity markets, particularly in Europe and emerging economies reliant on U.S. demand. However, if U.S. markets falter due to domestic policy missteps or weak economic data, expect a domino effect, especially in tech-heavy indices like the Nasdaq, which influences global tech valuations. China’s tentative recovery, as seen in JD.com’s context, could also be a wildcard—if stimulus measures gain traction, it might lift global sentiment; if not, it could drag on commodities and trade.
Investment and Policy Implications
So, what should investors do with this information? First, adopt a balanced approach. The historical strength of Q4 and September’s positive close suggest staying invested, particularly in undervalued growth sectors like fintech (PayPal) and semiconductors (AMD). However, given potential volatility from the government shutdown and jobs report, maintain dry powder—cash reserves or options strategies can help capitalize on dips.
Second, diversify geographically and strategically. While U.S. markets look promising, exposure to emerging markets via calculated plays like JD.com options can hedge against domestic downturns. Policy-wise, investors should monitor Fed rhetoric post-jobs report. If data suggests overheating, rate hikes could return, pressuring growth stocks. If weakness emerges, expect dovish signals, favoring risk assets.
Near-Term Catalysts to Watch
Looking ahead, several catalysts will shape the near-term trajectory for Q4 2025:
– Government Shutdown Resolution (or Lack Thereof): A quick resolution could spur a relief rally; prolonged gridlock might trigger a 3-5% pullback in the S&P 500.
– Friday’s Jobs Report: Consensus expects solid job growth; a miss below 150,000 could spook markets, while a beat above 200,000 might fuel bullish momentum.
– Corporate Earnings Season: October kicks off Q3 earnings, with tech and retail under the microscope. Strong guidance from bellwethers like AMD or PayPal could drive sector rallies.
– Global Macro Data: Watch China’s PMI and Europe’s inflation readings—positive surprises could lift global risk appetite.
Conclusion: Positioning for Opportunity
In closing, September’s green close and historical Q4 strength paint an encouraging picture for stocks in 2025, but the path isn’t without bumps. As a seasoned observer, I see this as a time for cautious optimism—stay invested, but be ready to pounce on pullbacks. Stocks like PayPal and AMD offer value and growth, while options on JD.com provide a speculative edge without full exposure. Keep an eye on near-term catalysts, balance your portfolio, and remember: markets reward the patient and prepared. Until next time, keep analyzing, keep investing, and let’s navigate these markets together. What are your thoughts on Q4? Drop a comment or join the conversation on our platform—I’d love to hear your take!