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Buy 5 Stocks to Stay Safe in Wall Street's Historically Worst Month
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Key Takeaways
Wall Street eyes defensive stocks as September has historically delivered market declines.
Concerns include tariff legality, Fed independence challenges, and rate cut uncertainty.
AIZ, HAS, MOS, VIRT and HLI offer growth, dividends, and low volatility profiles.
Wall Street has maintained its bull run in 2025 after an impressive rally in the last two years. U.S. stock markets ended August on a solid note. Year to date, the broad-market index — the S&P 500 — recorded 20 all-time highs, of which five were recorded in August alone.
Nevertheless, September is historically known as the worst-performing month for U.S. equities. According to Stock Trader’s Almanac, the S&P 500 index has recorded an average decline of 0.7% in September since 1950.
Stock Trader’s Almanac further reported that the situation has aggravated in the last 10 years. The average decline of the S&P 500 in September in the last 10 years was 2%, while the average decrease in the last five year was 4.2%.
This year, volatility has appeared on Wall Street since the first trading day of September. Moreover, market participants are worried about three immediate concerns which will be discussed blow.
On Aug 29, the U.S. Court of Appeals for the Federal Circuit ruled that most of President Donald Trump’s global tariffs including “reciprocal” tariffs are not legally acceptable. In a 7-4 verdict, the court said that the Constitution does not allow the President to impose such tariffs unilaterally.
The court ruling said “Tariffs are a core Congressional power. The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.” However, the verdict will not be applicable till Oct. 14, during which time the Trump administration can appeal to the Supreme Court against this ruling.
President Trump has called the Appeals Court’s verdict “Highly Partisan” and expressed confidence that the apex court will finally rule in his administration’s favor.
Fed’s Autonomy
Last week President Donald Trump removed governor Lisa Cook from the board of the Federal Reserve, citing "sufficient reason" to believe Cook had made false statements on her mortgage. This development happened after Federal Housing Finance Agency Director Bill Pulte accused Cook of having committed “mortgage fraud.”
Trump argued that the Constitution has vested power in the hands of the President to interfere in the matters of the Fed’s board in situations like this. However, governor Cook has challenged her removal by the President in court.
The court is yet to conduct a hearing related to this lawsuit. CNBC reported that 593 noted economists including several Nobel laureates signed an open letter backing Cook and defending the Fed’s independence.
Fed Rate Cut
Market participants are extremely hopeful that the Fed will cut the benchmark interest rate by 25 basis-points in September. The CME FedWatch currently shows a 97.6% probability of a 25 basis-point cut in the Fed Fund rate in this month’s FOMC meeting.
Fed Chairman Jerome Powell gave a tepid indication of a rate cut last month at the Jackson Hole Symposium. However, the last released core PCE inflation data — the Fed’s most favorite inflation gauge — edged up 0.1% in July from June.
Several giant retailers (both brick and mortar and online) warned in their last earnings conference call that they will be forced to raise prices in the near term due to Trump tariffs. This may affect consumer spending in the future. Moreover, the nonfarm payroll of August will be a major indicator of the central bank’s future course of action.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Assurant Inc.
Assurant is focused on inorganic and organic growth strategies. For 2025, AIZ expects adjusted EBITDA, excluding reportable catastrophes, to increase modestly. While Global Housing should gain from improved performance in Homeowners, Global Lifestyle stands to gain from growth across Connected Living and Global Automotive.
These strengths validate the effectiveness of AIZ’s long-term strategy of focusing on higher growth fee-based and capital-light businesses. AIZ plans to deploy capital, mainly to fund business growth and return capital to its shareholders. A lower debt level and improved leverage ratio add strength.
Assurant has an expected revenue and earnings growth rate of 5.7% and 5.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 7.6% over the last 30 days. AIZ has a beta of 0.55 and a current dividend yield of 1.5%.
Hasbro Inc.
Hasbro is focused on high-margin segments such as Wizards, Licensing and Digital, which support its bottom-line growth. Also, HAS’ focus on the entertainment pipeline, strategic partnerships and product innovations bodes well.
Hasbro is actively leveraging partnerships to accelerate growth across digital gaming, licensing and entertainment platforms. In the second quarter of 2025, HAS expanded its strategic partnerships to strengthen digital and licensing businesses.
By 2027, digital gaming and licensing partnerships are projected to contribute about 25% of corporate revenues. Additionally, HAS anticipates growth in gaming-related revenues, encompassing board games, trading cards, digital licensing and video games.
Although tariff uncertainty and supply-chain disruptions are concerns, HAS raised its full-year 2025 revenues and adjusted EBITDA guidance. Strong performance in the Wizards segment, games portfolio, licensing partnerships and digital initiatives are encouraging for HAS’ prospects.
Hasbro has an expected revenue and earnings growth rate of 6.6% and 21.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the last 30 days. Hasbro has a beta of 0.59 and a current dividend yield of 3.5%.
The Mosaic Co.
The Mosaic is likely to gain from the higher demand for fertilizers. Demand for phosphate and potash had been healthy in 2024, and the momentum is likely to continue this year. Strong grower economics and crop commodity prices are driving fertilizer demand globally.
MOS is also expected to benefit from its cost-reduction actions. An improvement in the operating cost structure through transformation is expected to boost profitability. MOSt also remains focused on carrying out high-return investments. The ramp-up of Esterhazy Hydrofloat is expected to enable Mosaic to produce low-cost potash tons. The new Palmeirante center also supports MOS’ growth objectives in Brazil.
The Mosaic has an expected revenue and earnings growth rate of 16.4% and 60.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.2% over the last 30 days. MOS has a beta of 0.99 and a current dividend yield of 2.7%.
Virtu Financial Inc.
Virtu Financial’s well-diversified business model provides a solid foundation for sustainable long-term growth. VIRT Execution Services segment continues to benefit from new product offerings and strategic partnerships.
Ongoing cost-control initiatives are contributing to improved adjusted net margins, and VIRT’s ROC stands at a robust 17.5%, well above the industry average of 7.3%. VIRT’s strong balance sheet enables it to return substantial value to shareholders through an active share repurchase program and a consistent dividend payout.
Virtu Financial has an expected revenue and earnings growth rate of 18.9% and 33.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 17.9% over the last 60 days. VIRT has a beta of 0.69 and a current dividend yield of 2.3%.
Houlihan Lokey Inc.
Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions, capital solutions, financial restructuring and financial and valuation advisory. HLI serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of HLI’s commitment to client success across its advisory services.
Houlihan Lokey has an expected revenue and earnings growth rate of 13.1% and 21.9%, respectively, for the current year (ending March 2026). The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the last 60 days. HLI has a beta of 0.86 and a current dividend yield of 1.2%.
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Buy 5 Stocks to Stay Safe in Wall Street's Historically Worst Month
Key Takeaways
Wall Street has maintained its bull run in 2025 after an impressive rally in the last two years. U.S. stock markets ended August on a solid note. Year to date, the broad-market index — the S&P 500 — recorded 20 all-time highs, of which five were recorded in August alone.
Nevertheless, September is historically known as the worst-performing month for U.S. equities. According to Stock Trader’s Almanac, the S&P 500 index has recorded an average decline of 0.7% in September since 1950.
Stock Trader’s Almanac further reported that the situation has aggravated in the last 10 years. The average decline of the S&P 500 in September in the last 10 years was 2%, while the average decrease in the last five year was 4.2%.
This year, volatility has appeared on Wall Street since the first trading day of September. Moreover, market participants are worried about three immediate concerns which will be discussed blow.
At this stage, it should be prudent to invest in low-beta (beta >0<1) high-yielding stocks with a favorable Zacks Rank. Five such stocks are: Assurant Inc. (AIZ - Free Report) , Hasbro Inc. (HAS - Free Report) , The Mosaic Co. (MOS - Free Report) , Virtu Financial Inc. (VIRT - Free Report) and Houlihan Lokey Inc. (HLI - Free Report) . Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Concerns About Tariffs’ Legal Validity
On Aug 29, the U.S. Court of Appeals for the Federal Circuit ruled that most of President Donald Trump’s global tariffs including “reciprocal” tariffs are not legally acceptable. In a 7-4 verdict, the court said that the Constitution does not allow the President to impose such tariffs unilaterally.
The court ruling said “Tariffs are a core Congressional power. The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.” However, the verdict will not be applicable till Oct. 14, during which time the Trump administration can appeal to the Supreme Court against this ruling.
President Trump has called the Appeals Court’s verdict “Highly Partisan” and expressed confidence that the apex court will finally rule in his administration’s favor.
Fed’s Autonomy
Last week President Donald Trump removed governor Lisa Cook from the board of the Federal Reserve, citing "sufficient reason" to believe Cook had made false statements on her mortgage. This development happened after Federal Housing Finance Agency Director Bill Pulte accused Cook of having committed “mortgage fraud.”
Trump argued that the Constitution has vested power in the hands of the President to interfere in the matters of the Fed’s board in situations like this. However, governor Cook has challenged her removal by the President in court.
The court is yet to conduct a hearing related to this lawsuit. CNBC reported that 593 noted economists including several Nobel laureates signed an open letter backing Cook and defending the Fed’s independence.
Fed Rate Cut
Market participants are extremely hopeful that the Fed will cut the benchmark interest rate by 25 basis-points in September. The CME FedWatch currently shows a 97.6% probability of a 25 basis-point cut in the Fed Fund rate in this month’s FOMC meeting.
Fed Chairman Jerome Powell gave a tepid indication of a rate cut last month at the Jackson Hole Symposium. However, the last released core PCE inflation data — the Fed’s most favorite inflation gauge — edged up 0.1% in July from June.
Several giant retailers (both brick and mortar and online) warned in their last earnings conference call that they will be forced to raise prices in the near term due to Trump tariffs. This may affect consumer spending in the future. Moreover, the nonfarm payroll of August will be a major indicator of the central bank’s future course of action.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Assurant Inc.
Assurant is focused on inorganic and organic growth strategies. For 2025, AIZ expects adjusted EBITDA, excluding reportable catastrophes, to increase modestly. While Global Housing should gain from improved performance in Homeowners, Global Lifestyle stands to gain from growth across Connected Living and Global Automotive.
These strengths validate the effectiveness of AIZ’s long-term strategy of focusing on higher growth fee-based and capital-light businesses. AIZ plans to deploy capital, mainly to fund business growth and return capital to its shareholders. A lower debt level and improved leverage ratio add strength.
Assurant has an expected revenue and earnings growth rate of 5.7% and 5.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 7.6% over the last 30 days. AIZ has a beta of 0.55 and a current dividend yield of 1.5%.
Hasbro Inc.
Hasbro is focused on high-margin segments such as Wizards, Licensing and Digital, which support its bottom-line growth. Also, HAS’ focus on the entertainment pipeline, strategic partnerships and product innovations bodes well.
Hasbro is actively leveraging partnerships to accelerate growth across digital gaming, licensing and entertainment platforms. In the second quarter of 2025, HAS expanded its strategic partnerships to strengthen digital and licensing businesses.
By 2027, digital gaming and licensing partnerships are projected to contribute about 25% of corporate revenues. Additionally, HAS anticipates growth in gaming-related revenues, encompassing board games, trading cards, digital licensing and video games.
Although tariff uncertainty and supply-chain disruptions are concerns, HAS raised its full-year 2025 revenues and adjusted EBITDA guidance. Strong performance in the Wizards segment, games portfolio, licensing partnerships and digital initiatives are encouraging for HAS’ prospects.
Hasbro has an expected revenue and earnings growth rate of 6.6% and 21.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the last 30 days. Hasbro has a beta of 0.59 and a current dividend yield of 3.5%.
The Mosaic Co.
The Mosaic is likely to gain from the higher demand for fertilizers. Demand for phosphate and potash had been healthy in 2024, and the momentum is likely to continue this year. Strong grower economics and crop commodity prices are driving fertilizer demand globally.
MOS is also expected to benefit from its cost-reduction actions. An improvement in the operating cost structure through transformation is expected to boost profitability. MOSt also remains focused on carrying out high-return investments. The ramp-up of Esterhazy Hydrofloat is expected to enable Mosaic to produce low-cost potash tons. The new Palmeirante center also supports MOS’ growth objectives in Brazil.
The Mosaic has an expected revenue and earnings growth rate of 16.4% and 60.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.2% over the last 30 days. MOS has a beta of 0.99 and a current dividend yield of 2.7%.
Virtu Financial Inc.
Virtu Financial’s well-diversified business model provides a solid foundation for sustainable long-term growth. VIRT Execution Services segment continues to benefit from new product offerings and strategic partnerships.
Ongoing cost-control initiatives are contributing to improved adjusted net margins, and VIRT’s ROC stands at a robust 17.5%, well above the industry average of 7.3%. VIRT’s strong balance sheet enables it to return substantial value to shareholders through an active share repurchase program and a consistent dividend payout.
Virtu Financial has an expected revenue and earnings growth rate of 18.9% and 33.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 17.9% over the last 60 days. VIRT has a beta of 0.69 and a current dividend yield of 2.3%.
Houlihan Lokey Inc.
Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions, capital solutions, financial restructuring and financial and valuation advisory. HLI serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of HLI’s commitment to client success across its advisory services.
Houlihan Lokey has an expected revenue and earnings growth rate of 13.1% and 21.9%, respectively, for the current year (ending March 2026). The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the last 60 days. HLI has a beta of 0.86 and a current dividend yield of 1.2%.