On the radio show and in this space as well we’ve talked about how September is traditionally the absolute worst-performing calendar month for the S&P 500. Since 1928, the average September loss for the S&P is 1.13%. While September 2026 was slightly better than that trend (the S&P was down 0.5%), as the chart below powered by YCharts illustrates – 10 of the 11 sectors covered by State Street Select’s Sector SPDR ETF’s were in negative territory. The very strong outlier? Technology.
The technology sector’s dramatic outperformance becomes even more striking when contrasted against the S&P 500 index. During this late-summer stretch, a traditional cap-weighted benchmark would have felt immense downward gravity. Because ten out of eleven market sectors finished in the red—with major pillars like Materials, Financials, and Real Estate plunging over 7%—most the index's underlying constituents were in a steep correction. In a typical market cycle, such widespread bleeding drags the entire benchmark down into a deep, synchronized retreat.
However, because the modern S&P 500 is heavily top weighted by mega-cap technology and communication design companies, the 4.96% surge in the XLK Technology ETF acted as an incredibly powerful counterweight. This stark divergence illustrates a "two-speed market." On one path, the equal-weighted reality of the average stock was suffering under the weight of macroeconomic pressures, dragging down cyclical and defensive sectors alike. On the other path, a highly concentrated cluster of secular growth engines defied that gravity entirely. For investors benchmarked against the S&P 500, portfolio returns during this window were entirely dictated by their exposure to this single, resilient tech channel.
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