• US stocks are one week into what's historically been their worst month of the year, in what is known as "The September Effect".

• The S&P 500 is currently down about 1% so far this month.

• Market veteran Ed Yardeni has highlighted some of the key risks facing investors this time around.

US stocks are one week into what's historically been the worst month of the year for the market.

Since 1945, the S&P 500 has slid 0.7% on average in September, data from CFRA Research shows. This year, it's down by about 1% so far in the month.

Ed Yardeni, president of Yardeni Research, wrote in a Tuesday note to clients that September is "widely viewed as a rotten month for stocks", and listed the key risks facing investors this time around.

High bond yields

Yardeni points to elevated yields in the bond market as a factor that dulls the appeal of equities. The rate on 10-year Treasuries hit a 16-year high of 4.36% recently - it was around 4.25% on Friday.

US Treasuries are considered some of the safest assets in the world and when their yields rise, the securities become relatively more attractive to investors, potentially leading them to reduce investing in equities.

"In addition, investors and traders are jittery about next Wednesday's CPI report for August," Yardeni wrote. A higher inflation rate could push bond yields higher and add pressure on the Federal Reserve to raise interest rates further - which would be negative for stocks.

Rising oil prices 

Higher global oil prices are fueling the threat of inflation again, undermining investor sentiment in the stock market.

WTI crude oil prices have rallied 38% from lows reached in May to hit the highest levels since November, with producers including Saudi Arabia and Russia extending output cuts.

Yardeni also sees the risk that potential economic stimulus measures by China could boost oil demand and thus "heighten inflationary concerns".

Inflation, interest rates

Inflation concerns among stock-market investors may grow ahead of the consumer-price report out of the US, due September 13.

"The jitters over the CPI release next Wednesday are likely to increase in coming days," Yardeni wrote, citing the uncertainty surrounding the forthcoming release.

The Cleveland Fed's CPI tracker is predicting headline and core inflation rates for August at 3.8% and 4.5%, which would be "unhappy surprises," he added. US inflation measured 3.2% in July.

"Even the FOMC's participants don't know what they will decide at their next meeting on September 19 and 20," Yardeni warned, referring to the forthcoming meeting of Federal Reserve policymakers to decide on interest rates.