Remember September?

September was supposed to be a rough month.

The S&P 500 dropped -4% early this month, and fear took over the market. Everyone was bracing for a deeper correction. It took just 10 trading days to climb 5.4%, and now we’re witnessing the strength of a bull market with the S&P 500 hitting a new all-time high. With the Fed cutting rates by 50 basis points and inflation somewhat under control, the market is signaling a more favorable environment.

We’re in a sweet spot: a “soft landing” scenario. The economy isn’t crashing, and the Fed is easing up on rates. This is a perfect setting for stocks to continue climbing. Employment is holding strong, inflation is in check, and the market’s upward trend remains intact.

While we may see some volatility soon, the long-term outlook still looks bullish. Some worry about the yield curve inversion and the possibility of recession, but this situation is different. The Fed isn’t cutting rates because the economy is falling apart—it’s cutting because the economy is stable, and inflation is managed.

Until the market shows signs of weakness, there’s no reason to be defensive. Historically, an inverted yield curve has signaled recessions, but for now, the trend and price action tell us that’s not happening. This market could push the S&P 500 toward 6,000, which is just 5-6% higher from here. That’s not out of reach.

The bottom line: September wasn’t the disaster many expected. Now, instead, we’re surfing the wave of a powerful bull market, right where we needed to be.

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Written by Timothy Assi, a popular investor on eToro.

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