Citadel Securities chief strategist warns of tactical downside in September

Scott Rubner, Head of Equity and Equity Derivatives Strategy at Citadel Securities, is telling investors to brace for a rough September. In a note dated August 31, the strategist recommended trimming market exposure and picking up downside hedges while options remain cheap, flagging what he sees as a convergence of seasonal weakness, fading liquidity, and overstretched positioning heading into the month.

The timing is notable. The S&P 500 hit an intraday record of 7,816.70 earlier in August after rallying nearly 7% from late July into early August.

September’s track record speaks for itself

September has been the worst-performing month for the S&P 500 going back to 1928. That’s not a quirky stat from some cherry-picked window. It’s nearly a century of data pointing in the same direction.

Rubner identified several structural headwinds converging at once that could amplify the seasonal pattern this time around.

First, corporate buybacks are expected to slow around September 12 as companies enter blackout periods ahead of third-quarter earnings.

Second, retail investors have already shown signs of fatigue. Net buying activity from retail traders has been running at roughly half its average since 2019 during recent S&P 500 pullbacks.

Third, systematic strategies like CTA trend-followers and volatility control funds were approaching peak allocations at the time of Rubner’s note.

Options are priced for calm, which makes hedges a bargain

Equity options pricing was sitting at the cheapest levels of 2026 when he published, which creates an asymmetric opportunity for investors looking to protect their portfolios.

Those risks include a packed economic calendar. September brings the nonfarm payrolls report and, more critically, the Federal Open Market Committee meeting.

Long-term bullish, short-term cautious

Rubner was careful to frame this as a tactical call, not a structural one. Citadel Securities hasn’t turned bearish on US equities. The firm’s constructive long-term outlook remains intact.

Rubner has made similar cautionary notes in prior years around this time, but the confluence of factors in 2026, record highs followed by declining retail participation, systematic funds at capacity, and buyback blackouts, gives the warning more weight than a generic “September is bad” reminder.