August is shaping up to be a poor month for the Nasdaq Composite, but history suggests that it will only get worse before it gets better. The Nasdaq Composite is headed for its worst month since May, down by more than 4%. It’s also the worst-performing of the three major averages; the Dow Jones Industrial Average and the S & P 500 were down by more than 2% and 3%, respectively. Significantly, the tech-heavy index shrugged off gains even after Nvidia last week reported a blowout quarter . The high-flying stock is the top-performing name in the S & P 500 this year, riding a surge of interest around artificial intelligence that is responsible for the bulk of the gains in the broader market. However, it may get worse for tech stocks from here if history is to be believed, according to CFRA’s Sam Stovall in a Monday note. September is actually the only month out of the year that the Nasdaq Composite averages a negative return, as well as the lowest rate of advance. Going back to 1971, the major benchmark averaged a drop of 0.86% in the month of September, the note said. Among those years, the steepest decline was a fall of 17% in 2001. “As a result of September’s track record for benchmark beatings, we remind investors to prepare for the possibility of disappointing results for both the S & P 500 and Nasdaq in the month ahead,” Stovall wrote in a Monday note. Other market participants point to the lackluster response to Nvidia’s earnings as a troubling signal for equities. In fact, John Roque, head of technical strategy at 22V Research, is wondering whether demand for Nvidia’s AI chips is so strong it could wind up cannibalizing demand for other products. “I continue to think it’s important to recognize that while NVDA released brawny earnings and revenues last Wednesday, its good news – which was supposed to manna for the overall market – was ignored. NVDA has also traded sloppily post its release such that even it appears to be tired,” Roque wrote Sunday. “But the inability of the market to embrace NVDA’s news is, I think, more important here. In short, the market balked at NVDA’s news and, unfortunately, the base runners/investors did not move up a base. Rather, and this doesn’t happen in baseball, it’s as if they were tagged out,” Roque said. In fact, if the Nasdaq Composite remains healthy, it should be able to rally off its oversold conditions based on its 50-day and 200-day moving averages, Roque added. However, if there continues to be weakness in the tech index, then the support of 13,000 will fall through with 12,260 the next support level. The Nasdaq closed Friday at 13,290.78. “And given the position of the MACD in the weekly chart … I continue to think that this correction is not over,” Roque added. The MACD is the moving average convergence/divergence indicator that technicians use to identify bullish and bearish trends in stocks. On Monday, however, the Nasdaq Composite appeared to consolidate somewhat from its August lows. The tech-heavy index rose nearly 0.7% during midday trading. Shares of Meta and Google-parent Alphabet up 1.3% and 0.9%, respectively. Nvidia shares rose 0.6%.