September has always been a "curse" for the financial market. This year, due to uncertainty over the expected rate cuts by the Federal Reserve, market volatility may further increase.

Historically, the prices of stocks, bonds, and gold usually decline in September because traders reevaluate their investment portfolios after the end of the summer vacation. Since 1950, the S&P 500 index and the Dow Jones Industrial Average have experienced the most significant decline in September. In the past decade, bonds have declined in September in 8 out of 10 years, while the price of gold has never risen in September since 2017.

September has arrived and the market may be experiencing a calm before the storm. The current stock market valuations are high, bond yields are at historical lows, and the market remains highly sensitive to uncertainty. The employment data to be released this Friday will be the focus of the market, and its results will directly influence the direction of the Federal Reserve's monetary policy.

The last employment data before the September rate decision makes the market more sensitive than usual.

After experiencing market volatility like a roller coaster in August, investors are pinning their hopes on the non-farm payroll data to be released on Friday. This data will provide key clues for the Federal Reserve's next steps, whether it will cut interest rates by 25 basis points or 50 basis points in September.

Bob Savage, Head of New York Bank Market Strategy and Insights, stated that the upcoming US employment data will have a decisive impact on the market trend for the remainder of the year.

Historical data shows that September often performs poorly in the financial markets. Investors tend to become more cautious and prefer low-risk investments to avoid potential losses. In a US election year, this sensitivity is even higher.

Analysis points out that as the market has already fully absorbed the expectation of four 25 basis point rate cuts before the end of this year, if the Fed's statement at the FOMC meeting on September 18 does not meet the dovish expectations, the risk of severe market volatility will increase.

"The decline could trigger a chain reaction, especially when the market is pricing in such a high probability of a Fed rate cut, investors are more sensitive than usual while pursuing the ideal state of the 'golden girl'." said Vishnu Varathan, Managing Director of Economics and Strategy at Mizuho Bank Singapore.

There is a certain level of risk in the current US stock market, especially when the stock prices of a few large technology companies decline, the entire market may be affected. "The current US stock market is mainly supported by a few large technology stocks, and these giant companies have a significant impact on the overall market index." said Manish Bhargava, CEO of Singapore Strait Investment Management. "Any unexpected event could lead to rapid liquidation of leveraged positions."

Strategists say that caution will be the key to navigating the market.

Another source of volatility is the first televised debate between Vice President Kamala Harris and former President Donald Trump next week.

Given the high level of risks from various sources, strategists say that caution will be the key to navigating the market.

Data from RBC Capital Markets shows that hedge strategies have had a cost advantage for a long time, and LPL Financial is bullish on investment prospects in the US communications services, energy, and healthcare sectors.

The New York Stock Exchange believes that the current upward trend in the stock market requires economic growth and a loose policy environment to support it.