The National Australia Bank Ltd (ASX: NAB) share price fell more than 2% in September, while the S&P/ASX 200 Index (ASX: XJO) increased by over 2%, as shown in the chart below.

It's common for a share price to go through volatility, but it can be disappointing when a share goes down when the overall index has increased.

NAB didn't announce market-sensitive news during the month. Its most interesting announcements were the ongoing updates about the share buyback. This can help support the NAB share price, increase the ownership of the remaining shareholders and boost shareholder-related financial statistics such as earnings per share (EPS).

The most important market development in September appears to have been nothing to do with NAB.

Chinese stimulus causes a rotation

During the month, institutional investors appear to have made a significant move to sell ASX bank shares like NAB and buy ASX mining shares such as BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

During September, the BHP share price climbed 12.7%, and the Rio Tinto share price rose 15.8%.

Last month, China announced various financial measures to boost its economy, including reducing the seven-day repo rate by 20 basis points (0.20%), cutting existing mortgage rates by 50 basis points (0.50%), and reducing Chinese banks' reserve ratio requirement (RRR) by 50 basis points (0.50%).

This major move by the Asian superpower rocketed the share prices of ASX iron ore shares and the iron ore price. According to Trading Economics, the iron ore price bounced from around US$90 per tonne to US$110 per tonne in just a few days.

WAM Leaders Ltd (ASX: WLE) portfolio manager John Ayoub warned that this could happen when he said earlier in September:

The easy trade has been sell resources and buy banks, but when that unwinds, there's going to be a rapid snapback.

So we need to get ahead of that and start building positions, which we're doing now.

But we shouldn't forget that the NAB share price has still had an excellent 2024 to date. This year, it has risen 20%, and the ASX 200 is up 7.7%.

What next for the NAB share price?

I wouldn't be surprised to see more volatility. That's normal for the share market as there are different buyers and sellers every day.

The upcoming FY24 result announcement on 7 November 2024 could play a part.

Goldman Sachs is expecting NAB to generate $7 billion of net profit in the just-finished 2024 financial year. The broker then predicts net profit could increase to $7.1 billion in FY25.

According to Goldman Sachs' estimates, the current NAB share price is valued at 16.6x FY24's estimated earnings and 16.1x FY25's forecast earnings.

Goldman Sachs is currently neutral on NAB shares, with a price target of $34.24. This implies a decline of more than 7% over the next 12 months.