September 2022 Monthly Market Review

Equity markets saw steep declines in September as core inflation came out hotter than
expected, signaling the Federal Reserve may have to continue raising interest rates for
longer than expected. US equities declined 9.2% in September. This was the index’s worst
September since 2008 and the first three straight quarters of negative returns since 20091.
International developed and emerging market equities dipped even further, falling 9.3% and
11.7% respectively, as regional challenges in U.K., China, and a strong dollar dragged down
returns.
All sectors in the S&P 500 saw negative performance for the month. Healthcare, a historically
defensive sector, was the best performer, falling just 2.6%. The worst performers were Real
Estate (-13.2%), Communication Services (-12.2%), and Technology (-12.0%), all sectors
more sensitive to the business cycle. Even the year’s only positive sector, Energy, saw a
decline of 9.3% in September, bringing its year-to-date return to 34.9%. Across equity styles
and size, September’s results were poor across the spectrum, with no place to hide and no
clear winner… (View PDF)