Bitcoin, Bonds, and Stocks Enter a Dangerous September Pattern

September has a bad reputation on Wall Street, especially during US midterm election years. Across the last 10 midterm cycles, the average stock-market low arrived on September 2. 

By the time stocks reached those lows, they had fallen an average 16.77% from their previous high.

Bitcoin is entering the same period near $77,500, while US stocks remain close to record highs and long-term bond yields stay unusually elevated. The question now is whether 2026 follows the old pattern.

Midterm Lows Cluster in Early September

Hartford Funds studied 10 US midterm election years between 1986 and 2022. Every one saw stocks suffer a sizeable drop from their yearly high.

The damage varied enormously. Stocks fell 33.75% in 2002, while the biggest drop in 2014 was just 7.40%. The actual lows also occurred at very different points in the year.

So September 2 is a historical average, not a deadline for the next crash. And so far, 2026 has refused to follow the usual script.

The Fed is Debating a Rate Hike, Not a Cut

The macro setup has flipped since the spring, with Fed Chair Kevin Warsh using his first Jackson Hole speech on Friday to put prices first.

His own figures explain why, as the Fed chair said the PCE price index rose 3.7% over 12 months, while the six-month pace ran hotter at 4.1%. Inflation is not just high, it is accelerating.