Markets ended the last trading day of August in the red, with the Dow and S&P 500 posting their worst monthly declines since May 2012. Trading was slow on Friday as worries about the escalating Syria situation and the Fed appear to have discouraged some investors. For the week, the S&P 500 lost 1.84%, the Dow lost 1.33%, and the Nasdaq lost 1.86%.

Impending military action in Syria has contributed to recent market volatility. President Obama has been drumming up support for a military response to the use of chemical weapons in Syria, but a final decision has yet to be made. While the President has emphasized that he is seeking approval for a limited action, there's no way to know how long intervention in Syria might take or how it would affect oil production in the Middle East.

An end to Federal Reserve quantitative easing is also weighing on markets. Richmond Fed President, Jeffrey Lacker, a consistent supporter of tapering, said that current economic conditions support tapering, though other Fed officials have been more cautious. At this point, the data ahead of the Fed's September meeting remains unclear.  U.S. consumer spending barely rose in July, and consumer sentiment retreated from its six-year high in August, offering cautionary notes as the Fed weighs its tapering decision.  On the other hand, the number of Americans seeking unemployment claims fell last week as expected, suggesting that the job market strengthened in August.

Meanwhile, the U.S. economy accelerated in the second quarter because of a surge in exports, bolstering the case for an end to further quantitative easing.

Traders will have a lot of data to analyze this week; on everyone's radar is the August monthly Employment Situation report, which will be released on Friday. Analysts will also be poring over the ADP employment report to be released Thursday, which may give us some hints about Friday's report. This jobs data is particularly important because it will be one of the major factors considered at the next FOMC meeting; if the data is positive, it makes a September taper much more likely. Several Fed presidents are also scheduled to speak this week, and Fed watchers will be paying close attention to try and define the Fed's intentions ahead of the September 17 meeting.

While it's disappointing to end August on a sour note, keep in mind that markets are often thinly traded ahead of a holiday weekend, and volatility can cause major swings in equities under these conditions. Realistically, continued volatility is likely in the coming weeks and months as markets grapple with tensions in the Middle East, an end to quantitative easing, and continued sequestration debates in Washington. It's important to remember that volatility sometimes provides investment opportunities and that we vigilantly seek those opportunities for our clients.