Goldman Warns: Enjoy The Market Calm While It Lasts—October Chaos Is Coming

Piero Cingari

Wed, September 24, 2025

The best-performing September in 15 years just sent U.S. stock indexes to new highs — but that party could soon end, with Goldman Sachs expecting a surge in market volatility as October kicks off a gauntlet of earnings and macro risk.

With just days left in the month, the S&P 500, tracked by the Vanguard S&P 500 ETF (NYSE:VOO), is up 3.6%, on pace for its best September since 2010. That year, the index jumped 8.76%, while in 1997 it rose 6.22% — two of the only times the market defied September’s historically weak trend to this degree.

Tech stocks are doing even better. The Nasdaq 100, via the Invesco QQQ Trust (NASDAQ:QQQ), is up 5.5%, and the Technology Select Sector SPDR Fund (NYSE:XLK) has surged 7.5%, its second-strongest September since the ETF launched in 1999.

That’s not normal. Over the last 25 years, tech stocks have averaged a 2.2% loss in September.

But this year, names like Oracle Corp. (NYSE:ORCL), Tesla Inc. (NASDAQ:TSLA), Micron Technology Inc. (NASDAQ:MU) and Apple Inc. (NASDAQ:AAPL) have led a momentum surge fueled by AI demand and expectations of Federal Reserve rate cuts.

The result? A rare, almost euphoric September rally that feels more like July or December.

October Might Snap Investors Back To Reality

In a note published Tuesday, Goldman Sachs equity analyst John Marshall said the good times may not last. “Using history as a guide, we expect global equity volatility to increase in October.”

And the data supports that. Over the past several decades, realized volatility in October has been more than 25% higher than in other months, according to Goldman. The firm pointed to a long-standing pattern of surging trading activity, driven by corporate earnings pressure, year-end performance benchmarking and major macro catalysts.

“Event volatility could increase further as October earnings season is typically the most volatile of the year,” Goldman said, adding that FOMC meetings, Fed commentary, and the Consumer Price Index (CPI) report will all be in sharp focus.

October Is a Pressure Cooker for Wall Street

Goldman also noted that single stock trading volumes — both in shares and options — have historically peaked in October. From 1996 to 2024, the average daily notional volume of individual stocks and their options reached its highest point in October, reinforcing the idea that investors feel forced to act.

“We see this as further validating our hypothesis that performance pressure potentially drives investors to increase trading activity,” Goldman said.

The firm expects the volatility spike to be broad-based, but sees opportunities in single-stock options as a way to position around earnings-driven moves.

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Brace For The Shift

After a rare, euphoric September where stocks broadly defied seasonal gravity, October may come with a price. While earnings optimism and Fed tailwinds have powered this rally, volatility season is approaching — and traders might want to buckle up.