Jim Cramer warned that September is historically the weakest month for the stock market, known as the "September Effect." He reminded investors that volatility could increase, in line with historical records showing more negative returns this month.
In addition to stocks, Cramer emphasized that crypto markets such as Bitcoin also tend to fall in September. Analysts attribute this phenomenon to portfolio rebalancing after the summer and expectations for key economic data.
Cramer identified two main factors that will shake the market: inflation data and the jobs report. Both are major determinants of the Fed's decision on interest rates. Although the CME FedWatch shows a near 90% probability of a rate cut, any inflation or jobs data shock could delay the move.
However, Cramer added that political factors, especially President Trump's policies, have the potential to challenge the seasonal pattern. He advised investors to be cautious, but not overly pessimistic, as the actual outcome depends on a combination of macroeconomic and political factors.
