With earnings season behind us, investors have turned their attention to the final months of 2025. Specifically, what will it bring for ASX shares?
There's no doubt it's been a volatile year, with a significant decline in April, following a sharp rebound over the past few months for both the S&P/ASX 200 Index (ASX: XJO) and the S&P 500 Index (SP: .INX).
In its recent research note, August Equity Markets Review, Macquarie Group Ltd (ASX: MQG) commented on stock market seasonality, and the months ahead:
September is on average the most volatile month and this can continue into October. However, November tends to be the best month, and retail dominance should support a year-end rally.
Will this September be different?
As the saying goes, "History dosen't repeat itself, but often rhymes".
Based on the past 40 years of data, the ASX 200 has weakened in September, with an especially volatile period to follow.
US shares have followed a similar trend. Historically, September has been the worst month of the year. Since 1928, the S&P 500 has averaged a 1.7% decline in September.
Indeed, both the ASX 200 Index and the S&P 500 Index have started the month on a weaker note. The ASX 200 is down 0.6% so far, while the S&P 500 is sitting around 0.7% lower.
There have been several notable movers. On the ASX, CSL Ltd (ASX: CSL) has continued to fall after its FY25 result failed to impress investors. The healthcare giant is now trading below $210. In the US, chipmaker Nvidia has slid nearly 2% this month.
In recent days, investors have also been piling into safe-haven assets, with the gold price surpassing US$3,500. This has been driven by a range of factors, including renewed concerns over the US Federal Reserve's independence.
Although this is based on just a few days of trading, and could very easily reverse, early data suggests a weaker September could be on the cards.
What does this mean for investors?
At The Motley Fool, we advocate for long-term investing.
In other words, "time in the market, not timing the market".
There's no guarantee that ASX-listed or US-listed stocks will decline in September. And even if they did, it would unlikely affect investors' long-term returns if they hold high-quality companies for the next decade.
Instead of trying to guess whether the market will decline for a month or two, investors should research ASX shares to find their next market-beating stock idea.
Fortunately, the month following earnings season is an opportune time to do this with companies recently reporting their FY25 results and brokers releasing expert analysis.
Those looking for stock picking inspiration might want to check out some pieces released by my Fool colleagues this week.
Yesterday, The Motley Fool's Bart Bogacz revealed Macquarie's top ASX 200 gold sector stock.
For those looking for stock ideas in the smaller end of town, this morning, The Motley Fool's Bronwyn Allen unveiled 4 S&P/ASX All Ordinaries Index (ASX: XJO) stocks that have just received buy recommendations from experts.
