US stock market futures are seeing a decrease as Rosh Hashanah begins. Historically, late September is not favourable for stocks, with the last ten days showing an average decline of 1.1% since 1928.
The period between Rosh Hashanah and Yom Kippur averages a 0.5% decline in the S&P 500. Yom Kippur will end at nightfall on October 2. This year, the S&P 500 has largely defied this trend, although current futures have dropped by 0.3%.
Historically Weak Period for Stocks
We are now entering a historically weak period for stocks, with the old “Sell Rosh Hashanah, buy Yom Kippur” adage in play. Data going back to 1928 shows the S&P 500 has typically fallen over 1% in the final ten days of September. With the market feeling a bit heavy after last week’s hawkish Federal Reserve commentary, this seasonal trend carries extra weight.
Given this backdrop, we are seeing a notable uptick in expected volatility. The VIX has climbed to over 17 this past week, a significant jump from the summer lows near 13 that we saw back in July 2025. Traders could consider buying call options on the VIX, anticipating a further spike towards the 20 level if this seasonal dip materializes.
Equity Strategies and Market Positioning
On the equity side, demand for downside protection is growing, with the CBOE put/call ratio recently hitting 0.95. This suggests traders are increasingly positioning for a drop. We could look at buying near-term put options on major indices, targeting expirations just after Yom Kippur ends on October 2nd to capture this specific window of weakness.
For those who believe any drop will be modest, selling out-of-the-money call spreads is another strategy. This allows us to collect premium with the bet that the market will trade sideways or drift lower, but not rally strongly through early October. The defined risk of a spread is particularly attractive given the current uncertainty.
