After a dismal August and September where the S&P 500 declined 4.2% and 9.3%, respectively, the market was due for a bounce. Over the past month, equity markets staged a bit of a comeback.

The hopefulness surrounding the mid-summer rally has officially dissipated as the S&P 500 closed out September by setting a new year-to-date low and ending down six of the past seven weeks.

The recovery in equity prices that began in mid-June started to retreat this past month. All three major indices – the S&P 500, Nasdaq, and Russell 2000 – made a closing low on June 16th and topped out around the middle of August after advances of 17.4%, 23.3% and 22.5%, respectively.

A new economic and financial market narrative was not what market participants were looking for in June.  Over the past couple of weeks, the inflation story has morphed into a growth slowdown story.

The monthly returns for May do not quite paint an accurate picture of the real ride investors endured over the past several weeks. All major U.S. indices ended the month flat, except for the Nasdaq, which declined 2%. For the majority of the month, the path of least resistance was lower.

Last month, we discussed equity markets finding their footing amidst the pervasive negativity roiling through financial markets in early March. Well, that toehold was not strong enough to push us higher through April.

After back-to-back months of negative returns to start the year, the S&P 500 found its footing in mid-March following a shaky start to the month. Over a nine-trading day span, the S&P 500 advanced by 11%, which paled in comparison to the Nasdaq’s 16% rip higher.

The volatility in financial markets that began a little more than 3 months ago took another leg higher in the back half of February and into the first week of March. The swings in equity prices have not been for the faint of heart.

The inevitable has become reality. For months, we have spoken and written about the likelihood of the markets being on the precipice of entering a new volatility regime.

For the third straight year, U.S. equities ended meaningfully higher.  The S&P 500 led the way amongst major U.S. indices, soaring nearly 27%.