Shesa's September 2026 Investment Blog

                                                                                        By Shesa Nayak

Welcome to Shesa’s investment Blog! 

U.S Stock Market Update

The month of August was another productive month for the stock market. The Nasdaq rose approximately 4%, the S&P 500 gained 2.7%, the Dow was up 1.5%, and the small-cap Russell 2000 advanced about 1%. Although most major stock indexes are trading near their peaks, however roughly 40-50% of Nasdaq-100 stocks are trading more than 20% below their 52-week highs.

On August 26, Nvidia (NVDA) delivered another outstanding quarter. Revenue more than doubled year-over-year to $96.2 billion, and profits also more than doubled. The company further guided for approximately 70% revenue growth in fiscal 2028. The strong results and upbeat longer-term outlook helped ease some concerns about AI spending and lifted technology shares. However, just one day later, Nvidia went up but many tech stocks sold off sharply again. Markets these days rarely move gradually  and they often drop quickly before many investors fully process the news. Heavy sector rotation and algorithmic trading only make the environment more difficult for retail investors.

Economic Backdrop

Middle East tensions continue to escalate, pushing oil prices higher and contributing to persistent inflation. The oil prices have gone beyond $91, Crude price at $96 and diesel prices are at all-time high with national average of $5.85. Treasury yields have kept climbing, with the 10-Year Treasury yield at 4.78% and the 30-Year Treasury yield at 5.24%. (Note: when yields rise, bond prices fall.) As government bond yields increase, banks raise interest rates on consumer and business loans to maintain their profit margins against rising benchmark rates. This dynamic is creating uncertainty around Fed policy and adding to market volatility.

Nonfarm payrolls and ADP private-sector job reports had been trending below expectations in recent months. However, Friday’s August employment report surprised to the upside with a gain of 162,000 jobs (versus expectations of roughly 53,000). The unemployment rate held steady at 4.1%. This stronger data pushed the market-implied probability of a Fed rate hike at the September meeting to about 57% (from around 50% before the report). 

Fed Update

During his speech at Jackson Hole, Fed Chair Kevin Warsh made clear that he does not believe inflation has been defeated. He stated that the Fed needs to see underlying inflation moving clearly and quickly toward the 2% target, and argued that price stability will not simply restore itself. The speech was moderately hawkish, as expected, but stopped short of an explicit commitment to a rate hike in September. The next FOMC meeting is scheduled for September 15–16, where the Fed is currently viewed likely to raise rates. Volatility is likely to persist in the near term until either the Fed delivers a rate hike or inflation cools sufficiently to reduce the need for action. At present, the first option appears more probable.

Critical time ahead:

We have entered historically the weakest month of the year for equities, the so-called “September effect.” This risk is amplified by the fact that 2026 is a mid-term election year, which has often brought additional political and policy uncertainty causing major market volatility. I will write more on the broader implications, but first let’s review the major stock market indexes.

Indexes	Close FRI 12/31/25	Close FRI 9/4/26	Change in 2026	% Change in 2026
DOW	48,063.99	53,414.25	5,350.26	11.13
S&P 500	6,845.5	7,718.60	873.10	12.75
NASDAQ	23,241.99	26,506.99	3,265.00	14.05
Russel 2000	2,481.91	2,975.65	493.74	19.89
SOX (Semi)	8,083.13	11,735.26	3,652.13	45.18

Economic

• CPI/Inflation: 3.4% (July). August CPI due on Friday, 9/11.
• PCE inflation 3.3% annually in July
• GDP Growth: 1.5% (Q2), 2.1% (Q1)
• Non Farm Payrolls: 162,000 vs. 53,000. Unemployment. July 21K vs. 80K.
• Unemployment: 4.1%
• ADP (Private sector jobs): 38,000 vs. 47,000, July: 44K vs. 70K
• Interest Rate: 3.75% 
• Retail Sales (July): -0.6% (6 straight months of declining retail sales)
• 10-Year Treasury Yield: 4.78
• 30-Year Treasury Yield: 5.24%

Earnings: For Q2, 99% of S&P 500 companies have reported earnings. We saw another spectacular earnings season, with earnings growth of approximately 52% year-over-year, the highest since Q2 2021, when earnings were up 91.6%.

Earnings Update

• For Q2 (current quarter), S&P 500 companies are expected to report year-over-year growth of 52% and revenues of 15.5%.
• For Q3 2026, analysts are projecting earnings growth of 28.2% and revenue growth of 11.7%.
• For Q4 2026, projected earnings growth of 25.8% and revenue growth of 11.4%.
• For the year 2026, projected earnings growth of 31.2% and revenue growth of 11.9%.
• For the year 2027, projected earnings growth of 14.4% and revenue growth of 8.9%.

Key Economic Report 

Two very important reports which may be critical for FED decision.

• Thursday, 9/10: Producer Price Index (PPI)
• Friday, 9/11: Consumer price index (Inflation)

The “September effect” and mid-term Election year 

We are officially in September, bringing us face-to-face with the infamous 'September effect'—historically the worst month of the year for the stock market. This seasonal drag becomes even more pronounced during a midterm election year. But before we unpack the historical weight of September, let’s first look at the current positives holding the market up.

Positives

• Earnings Growth: As you can see above, the earrings growth was 52% for Q2 and expected to be about 31% for the whole year of 2026. This is exceptional.
• Continued AI spending boom (data centers, infrastructure, and adoption) by major companies
• The corporate sector remains strong and expected to continue due to AI spending.

So how is performance of stock market in September?

Since 1928, the S&P 500 has averaged a negative return of -1.17% in September, closing lower in 56% of those years. This makes it the only month on the calendar with a negative long-term track record. However, a 56% historical failure rate also means that September finishes in the green 44% of the time. In fact, the last two years completely defied the trend: September 2024 saw steady gains across major indices, and last year, September 2025 delivered a powerful 3.5% return for the S&P 500 alongside a massive 7.5% tech rally in the Nasdaq. 

September 2026 is a midterm election year 

As the readers may be aware, this is the 2nd term of President Trump and we are in the 2nd year of presidential cycle. Historically, midterm years have been the weakest of the cycle for the stock market.

• The month of September in a the midterm election years has an average return of about -1.1%, with positive results only around 48% of the time. However, since 1990 through 2025, the S&P 500 averaged a return of -1.35%, the Nasdaq -1.59%.
• Usually, from mid-August through mid-October has frequently been challenging in midterm years. Volatility tends to rise as election uncertainty increases.
• Midterm election years have produced the lowest average annual S&P 500 returns of the presidential cycle around 4.5% since 1950, well below the other three years. Please note that this year S&P has already gone up 12.75% so far this year. 

Where market tend to move after the mid-term election

• Markets have historically bottomed around the midterm election period, potentially around mid-October.
• 12 months after midterm elections have produced solid 14 - 18% return in every cycle since early 1950s, 95% of time.  Last time it was negative in almost century in 1939. Hence, it’s advisable to get invested after the election not to miss the opportunity. History may not necessarily get repeated but it’s highly likely it does..

Key Risks and Headwinds

• Inflation and Interest Rates: Persistent higher inflation due to Geopolitical situation and higher oil and gas prices tend to increase inflation risks
• Weak labor market except August, Avg hourly earnings at the lowest level since May 2021
• There are no major catalysts, so market may become more jittery. 
• Federal reserve is hawkish and may raise interest rate
• Consumer and Economic Slowdown: Signs of fatigue in consumer spending (6 straight months of declining retail sales), deteriorating consumer sentiment.

What should be the approach?

Ultimately, every investor must craft a strategy aligned with their personal comfort level. Portfolio decisions depend on an array of moving parts - including age, risk tolerance, available capital, and current liabilities. A younger investor with a decades-long horizon has the luxury of absorbing higher risk, whereas someone approaching retirement could find that same volatility financially detrimental. The market is a continuous classroom. Personally, my current strategy is to gradually trim certain positions and build a cash reserve to deploy later. This does not feel like the right macro environment to blindly dive in with both hands, regardless of daily market swings. Instead, a patient 'wait-and-see' approach until mid-October seems prudent. However, as the mid-term election window approaches, history suggests it is highly advisable to be fully invested so you do not miss the powerful post-election surge.

Let me sum up

This year - 2026 has already shown stronger year-to-date performance than a typical midterm path so far. Post mid-term election has been extremely beneficial for the investors, so I feel not to miss that time and remain invested. Having said that, let’s not forget that Fundamentals (earnings, interest rates, inflation, geopolitics, etc.) generally drive markets more than the calendar or election cycle alone. And market volatility has been an ongoing phenomenon, hence better to be watchful.

Stock Market TOP sectors for 2026 (as of 7/5/26)

Sector	Performance Year-To-Date %
Energy (TOP)	41.59
Information Technology	23.41
Materials	14.70
Industrials	12.76
Healthcare	10.53
Real Estate	9.59
Consumer Discretionary (WORST)	-1.81

You can click below link to view complete sectorial performances:

Source: https://www.barchart.com/stocks/sectors/rankings?timeFrame=Ytd

Equity to watch

Other stocks to watch: NVDA, MU, TSLA, SPCX, AAPL, VTV, MRNA

Note: The above are not recommendations to buy/sell. The list is condescend due to uncertain market situation. 

Now let me discuss the stock for this month in my blog portfolio.

MP Materials (MP)

MP Materials is a U.S. rare-earth materials and magnet manufacturer operating the Mountain Pass mine in California. The company is expanding from mining and processing rare earths into manufacturing permanent magnets in the U.S., with the goal of building a domestic supply chain from mine to magnet and reducing dependence on China.

Why Do I Like MP Materials?

Mountain Pass is one of the world’s highest-grade rare earth deposits and the only large-scale U.S. mine. The rare earths and permanent magnets are becoming increasingly important for defense, EVs, robotics, AI infrastructure and other advanced technologies. China dominates much of the global rare-earth processing and magnet supply chain, making domestic production strategically important for the U.S.

MP Material’s partnership with the U.S. Department of War provides major financial and strategic support, including a long-term high-purity rare earth material price-floor agreement and support for expanding domestic magnet production. I also see significant long-term potential from humanoid robots such as Tesla's Optimus, which could create additional demand for rare-earth magnets used in motors and actuators if these robots are produced at scale.

MP is also moving beyond mining into higher-value magnet manufacturing. If the company successfully executes this transition, I believe its long-term earnings potential could be significantly higher than what the current business represents.

Financials

MP's financial performance is improving significantly. In Q2 2026, revenue increased 89% year over year to $108.5 million. The EBITDA improved to $28.5 million, compared with a $12.5 million loss in the same quarter last year. The high-purity rare earth material production increased 41% to 840 metric tons, and sales increased 127% to 1,006 metric tons.

The company is still developing its profitability, but the financial trend is moving in the right direction. I believe earnings could accelerate significantly as MP scales its higher-margin magnet business.

Strategy

Honestly, MP Materials is still trading at a premium based on its current earnings, but the stock has pulled back significantly from its 52-week high. Currently, the stock is trading around $54.53, about 46% below its 52-week high of $100.25. I believe this pullback provides a better entry point for long-term investors who believe in the rare-earth and U.S. supply-chain story.

I would like to slowly accumulate MP rather than invest aggressively at once. Now that we are in September I would be even more careful. There may be further pullbacks, but I would view those as opportunities to add for the long term. I don't put much emphasis on analyst price targets. For me, the important factors are the growth of its magnet business, execution of the 10X facility and improvement in profitability. 

Risks

The biggest risk is execution, as MP still needs to successfully scale its magnet manufacturing and complete the 10X facility. China remains a major competitor and could put pressure on rare-earth and magnet prices. The company is also still developing its profitability, while investors have high expectations. If MP fails to deliver on its growth plans, or if the overall market and growth stocks experience a major correction, the stock could fall sharply.

My Final thoughts

MP Materials is becoming much more than a mining company, with strong long-term prospects from rare-earth demand, U.S. supply-chain independence, defense and the growth of robotics. The Q2 results were encouraging, and the Department of War partnership provides additional support. The stock is still risky, but I believe the current pullback offers an opportunity to slowly accumulate for the long term. If MP successfully executes its magnet strategy and 10X facility, I believe the company could become significantly more valuable over the next several years.

Shesa’s Blog Portfolio (As of September 7, 2026)

Note: I have trimmed many position, may trimmed more or Sell.

Equity	Suggested Price	Current Price	Suggested Date	% Change	My View  (see disclaimer)
STOCK (All prices are in USD)
AAPL	12.9	319.97	1/25/13	2380%	Wait for new iPhone Release on 9/9
META	47	616.77	11/13/13	1212%	HOLD
MA	77.18	579.21	12/12/13	650%	HOLD
AMZN	15.58	258.51	4/12/14	1559%	HOLD
SHOP	13.48	145.09	204.91	976%	HOLD
SPG	54.59	209.44	5/25/20	284%	HOLD
NVDA	23.9	230.36	2/13/22	864%	Buy on Dip below $210
TSLA	290.25	354.08	5/1/22	22%	Accumulate - Long term
SOXL	15.66	117.28	4/6/23	649%	HOLD (Trimmed)
GOOG	123.25	335.31	5/21/23	172%	HOLD
PLTR	20.49	174.33	11/19/23	751%	HOLD
LRCX	76.16	307.65	11/11/24	304%	HOLD
RXRX	5.32	3.63	1/2/25	-32%	HOLD (Trimmed)
IONQ	37.46	39.52	2/18/25	5%	HOLD
AVGO	203.64	357.9	4/5/25	76%	HOLD (Trimmed)
APLD	11.18	26.37	6/15/25	136%	HOLD (Trimmed)
HOOD	94.4	122.11	7/6/25	29%	HOLD
NBIS	65.47	225.2	9/7/25	244%	HOLD (Trimmed)
AMD	214.16	477.57	1/1/26	123%	HOLD
VTV	196.99	226.46	4/4/26	15%	Accumulate - Long term
MU	542.21	1016.59	5/3/26	87%	Buy on Dip
DELL	420.91	524.14	5/31/26	25%	Buy on Dip
INTC	120.35	95.8	7/5/26	-20%	Hold (Trimmed)
MP	54.53	54.53	9/7/26	0%	NEW ADDITION
MUTUAL FUND
PRMTX	59.45	130.05	12/20/14	119%	HOLD
FSRPX	9.05	17.44	1/15/16	93%	HOLD

Equity Sold since my Last Blog

None - Trimmed many

Disclaimer: This blog is meant to provide my opinion only. The information provided is to the best of my knowledge but may not be accurate. I do NOT provide any professional recommendation to buy/sell any stock, ETF, mutual fund, or any other security(s). As an investor, it’s your hard-earned money and you decide what is best for you. The above are merely my own opinions on what I do. Please contact a professional money manager to buy/sell any security. I do not charge any fees or commission by writing the blog except anything from Google AdSense. I have position(s) on whatever security I put on my blog portfolio and avoid including any security that I do not own or follow. Anyone buying or selling the equities mentioned here must do at their own risk.

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