Wall Street on Edge After Worst Month of the Year

The stock market staggered to the end of its worst month of the year so far, dragged down by fears of a looming government shutdown, striking autoworkers, surging oil prices and the prospect of interest rates remaining high for longer than previously thought. Combined, they are darkening the outlook for the economy.

The S&P 500 declined almost 5 percent in September, its steepest monthly drop in 2023, and extending a more modest loss recorded in August. After fading on Friday afternoon, the index also notched its fourth straight week of losses, its longest losing streak of the year.

Just as a more hopeful outlook appeared to have taken hold among investors, propelled by robust corporate profits and resilient consumer spending, a series of potential problems have begun to arise, giving way to a much warier mood on Wall Street.

As sentiment swings, it highlights the pendulum of worry in the markets between the economy remaining too strong for policymakers intent on stamping out inflation and the looming risks that could suddenly pull growth too far in the opposite direction.

“Sentiment has soured,” said Steven Wieting, chief investment strategist at Citi Global Wealth. “There is just a lot of uncertainty.”

The flow of money into funds that buy U.S. stocks is roughly flat for the year, according to EPFR Global, a data provider. Nearly $1 trillion has flowed into money market funds over the same period, an investment that is tantamount to cash and seen as a haven in times of worry.