US Federal Reserve Chairperson Janet Yellen speaks on inflation dynamics and monetary policy at the University of Massachusetts.

The global market volatility of the past month that sent US stocks to their worst quarter in four years shows no signs of letting up just because the calendar turned to October.

Fund managers say they are bracing for another leg down in the S&P 500 stock index, after it fell more than 10 percent from the record high it reached May 20, and they are starting to increase cash and other defensive positions in their portfolios.

“Do I think we go into a bear market? No. Can we inch toward it? Absolutely,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

A weaker than expected US employment report for September published on Friday, diminished inflation expectations, and the prospects for a dim US corporate earnings season, are all factors fanning worries that the economic recovery could be derailed.

What makes matters worse is that investors have had few places to hide. Of the 21 major financial asset benchmarks tracked by Reuters, only two — the US dollar and 10-year US Treasury bonds — have posted positive returns so far this year, leaving investors with the worst financial market returns since the financial crisis in 2008.

Investors pulled $22 billion out of US equity funds in the third quarter, while putting a record $17 billion into US Treasury funds, according to Bank of America Merrill Lynch.

The yield of the benchmark 10-year Treasury fell below 2.0 percent on Friday for the first time since late August on concerns about growth in the US economy.

“There are some wicked winds swirling around from a macro perspective and you can’t afford to be complacent,” said Alan Gayle, head of asset allocation at Atlanta-based RidgeWorth Investments, who said he has been raising the cash levels in his portfolios until the market stabilizes.

The Federal Reserve’s decision in September to delay raising interest rates from financial crisis-era levels is exacerbating the uncertainty behind the market’s large swings, said Jonathan Golub, chief US market strategist at RBC Capital Markets.

“The market wants to see the economic conditions normalize. It’s starting to think that something is broken here and it makes them uncomfortable,” he said.

Friday’s lackluster jobs report will likely prompt the Fed to further delay raising interest rates until 2016, he said, prolonging market volatility into next year.

US payrolls excluding farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added that month, the Labor Department said. That marked the smallest two-month gain in employment in over a year and could fuel fears that the China-led global economic slowdown is sapping America’s strength. With the backdrop of slowing jobs growth in the US and the collapse of global commodity prices, third quarter corporate results will take on a heightened significance when companies begin reporting them next week, analysts said.

Overall, corporate earnings are expected to fall by 4.1 percent, according to Thomson Reuters data. That figure is skewed, however, by an expected 65 percent fall in energy sector results.

“The single most determinant variable is going to be earnings at this point,” said Mark Freeman, chief investment officer at Dallas-based Westwood Holdings Group.

Freeman has been raising his cash levels, and at the same moving more of his portfolio into health care and technology companies that show signs of growth. “The market continues to narrow and narrow. We’re not about to fall into a bear market, but I’m starting to think the raging bull market is over,” he said.

To be sure, some investors say that heightened volatility is welcome.

“This can create wonderful opportunities, and we’re actively looking to take advantage of egregious pricing,” said Connor Browne, managing director of equities at fund manager Thornburg Investment Management.

Healthcare and biotechnology stocks look particularly attractive, he said, after the Nasdaq Biotechnology Index fell nearly 20 percent over seven trading days recently in the wake of a vow by Democratic presidential candidate Hillary Clinton to take steps to curb high drug prices.

“We’re still not convinced that the stock market is going to correct significantly more than it already has, and have been buying on weakness in consumer discretionary, health care and technology stocks,” said Gina Martin Adams, equity strategist at Wells Fargo.