September was a challenging month for stocks as the S&P 500 pulled back almost 5%, while the 10 Year Treasury Yield rallied over 4.6% its highest level since 2007. The increase in rates was likely driven by the September Fed meeting where the Fed held rates steady, but hinted that we could see another hike before the end of the year. (YCharts)
While volatility can be uncomfortable, we believe that this type of market pull-back is normal and healthy, particularly after a prolonged move higher. From the lows in October, 2022 to the end of July the S&P 500 had rallied almost 30%. (YCharts)
We may continue to see more volatility in the short-term but we believe that the recent market move is likely not the beginning of a longer-term downtrend as the underlying trend of the market continues to be positive. As such, we expect to see stocks move higher over the next 9-12 months.