It could still be a volatile few weeks for investors as September was historically the worst month for the United States market, Craigs Investment Partners broker Chris Timms said yesterday.
There had already been some weakness earlier this year, but there could be more to come.
''That said, we view many of these issues as short-term ones and with the underlying economic picture looking stable, or even improving in some areas, September could yield some good buying opportunities as we move into the summer months.''
September also marked the five-year anniversary of a ''pretty horrendous'' month in 2008 when Lehman Brothers fell, Merrill Lynch sold and insurance giant AIG only just survived, he said.
Wall Street was bracing for a wave of economic reports this week, including the August jobs report, which might prove decisive in determining whether the economy was strong enough for the Federal Reserve to dial back its bond purchases in the middle of this month.
Anxiety about the Fed possibly reducing its $US85 billion ($NZ109.45 billion) monthly stimulus, also known as QE3, had hurt the stock market, which recorded its steepest monthly fall since May 2012, Mr Timms said.
But the market's greater anxiety, which had developed in recent weeks, was whether the Fed would press ahead with a reduction in support, even as the economy remained fragile.
The recent data had failed to provide evidence of the convincing growth the Fed said it wanted to see.
Until then, stocks would continue to benefit from the cheap money resulting from the Fed's bond purchases.
Speculation on the timing of Fed action triggered a bond market sell-off that sent mortgage rates to two-year highs.
The surge in home borrowing costs during the United States summer had shown signs of slowing the housing recovery, he said.
Analysts also were watching to see if the higher rates had discouraged employers from adding workers.
Mr Timms said there was a looming battle over the US debt ceiling and federal budget between the two opposing US political parties.
There was also uncertainty over who would succeed Ben Bernanke as chairman of the Fed from February next year.
''We have elections in Australia and Germany to add some uncertainty about leadership in key economies.
"And now, we've got conflict in Syria adding to the negative tone as the US appears to be preparing to respond to the chemical warfare that was used by the Assad regime.''
Australian markets were pricing in just a 7% chance of the Reserve Bank of Australia cutting interest rates again today, Mr Timms said.
