While several of Wall Street's largest trading desks moved toward defensive positioning as September began, none of the four members on CNBC's Investment Committee indicated an intention to sell.
Why Some Desks Are Buying Protection
Scott Rubner, head of equity and equity derivatives strategy at Citadel Securities, laid out a three-part case for trimming exposure in an August 31 note. He pointed to the end of the buyback season, noting that companies had authorized more than $1.1 trillion in repurchases through August and that this demand typically goes quiet from September 12 onward.
Rubner also flagged that September historically produces the year's weakest dip buying, with retail purchases on down days running at roughly half their normal pace. With the VIX closing August at 14.4 — its second lowest monthly finish since December 2025 — he advised using strength to reduce exposure and add inexpensive protection into the event window.
Other desks followed suit. JPMorgan's trading desk shifted to neutral, while Wells Fargo turned cautious citing concerns that AI-related capital spending may have peaked. Both institutions had been considerably more bullish just weeks earlier, when JPMorgan raised S&P forecasts amid declining hedging demand.
The Committee's Counterarguments
The four Investment Committee members offered distinct reasons for maintaining or building positions.
Joe Terranova of Virtus Investment Partners noted that momentum fell by double digits during the quarter while quality rose by 1.5%, suggesting the market has a healthier foundation to land on rather than a cliff to fall off.
Stephanie Link of Hightower said she is not attempting to time the month and would treat any pullback as an opportunity to add to positions she has been constructing. She highlighted that value stocks have outperformed growth by 14% this year, a rotation she views as constructive.
Jason Snipe of Odyssey Capital Advisors described himself as a long-term investor rather than a tactical trader, saying a soft patch in markets is precisely where he increases exposure.
Josh Brown of Ritholtz Wealth Management argued that the momentum rotation has already occurred, pointing out that the momentum index peaked on June 22 and has since declined 13.7%. He cautioned that trading the calendar primarily generates taxable gains rather than returns.
September's Record Is Less Severe Than Feared
The stocks that triggered these shifts entered the month on the back of 27 record closes this year. September carries a reputation as the weakest month on the calendar, but the long-term data is more moderate. Since 1950, September has cost the S&P 500 just 0.6% on average and finished higher in 34 of 75 years.
Labor market data also held steady. The Labor Department reported Tuesday that job openings remained at 7.3 million in July, up from 7.18 million in June. However, underlying measures of labor churn declined slightly: the quits rate slipped from 2.0% to 1.9%, the hires rate from 3.4% to 3.2%, and the layoffs rate from 1.1% to 1.0%.
Bitcoin Faces a Similar Seasonal Test
Bitcoin traded near $77,130 on Tuesday, down more than 2% over the prior 24 hours. Like equities, BTC carries a weak September seasonality record, and the broader question of whether traders will follow the desks into caution or emulate the committee's patience applies across both markets.
