Market Summary
U.S. equities traded lower at midday on Friday, September 4, as a stronger-than-expected August employment report reignited concerns over Federal Reserve policy tightening. The Dow Jones Industrial Average fell 305.39 points (-0.57%) to 53,380.72, the S&P 500 shed 33.92 points (-0.44%) to 7,713.79, and the Nasdaq Composite declined 110.72 points (-0.42%) to 26,494.39. All three major averages were sitting near session lows heading into the midday hour, having briefly steepened losses around 11:35 a.m. ET (Dow -367.39, S&P -39.65) before paring back modestly.
The catalyst for the selloff was the August Employment Situation report, which blew past expectations on nearly every headline metric — nonfarm payrolls rose 162,000 versus a Briefing.com consensus of just 45,000, and the unemployment rate fell to 4.1%. The data pushed the CME FedWatch Tool’s implied probability of a September rate hike to roughly 60%, up sharply from about 50% the day prior, sending Treasury yields higher across the curve and dragging the 10-year note yield back toward the 4.80% level.
Sector performance was broadly negative, with eight of the eleven S&P 500 sectors in the red at last check. Consumer discretionary and communication services led the drag, weighed down by lululemon’s disappointing guidance and Tesla giving back Thursday’s rally. A notable pocket of strength emerged in semiconductors, with the PHLX Semiconductor Index up as much as 2.8% intraday, helping keep the technology sector roughly flat even as software names — led by Adobe following its CEO transition news — sold off sharply. Credit-scoring and credit-bureau stocks were also hit hard following regulatory commentary from the FHFA.
Market Snapshot
| Index | Level | Change | % Change |
|—|—|—|—|
| Dow Jones Industrial Average | 53,380.72 | -305.39 | -0.57% |
| S&P 500 | 7,713.79 | -33.92 | -0.44% |
| Nasdaq Composite | 26,494.39 | -110.72 | -0.42% |
Breadth (NYSE): Advancers 1,275 | Decliners 1,268 | Volume 191.19 mln
Breadth (Nasdaq): Advancers 1,874 | Decliners 2,097 | Volume 3.01 bln
WaveFinder Market Breadth (Sept 4):
- Primary Sentiment: Very Bullish | 4% Sentiment: Bullish | 40 SMA Sentiment: Neutral
- Primary Bulls 1,056 vs. Bears 787
- 4% Bulls 126 vs. Bears 49
- 9-Month Bulls 18 vs. Bears 6 (Bull Follow-Through: 30%)
- Stocks Above 20-day SMA: 13%
- Stocks Above 40-day SMA: 46.31%
Sector Performance
Ranked from strongest to weakest based on Briefing.com Industry Watch and WaveFinder volatility (ATR) context:
1. Information Technology — Strong; roughly flat on the day as a 2.8% surge in the PHLX Semiconductor Index offset sharp software-sector losses. (ATR -1.04%, falling)
2. Industrials — Strong (specific % not disclosed). (ATR -1.56%, falling)
3. Communication Services — Weak, -1.1%. (ATR 1.34%, falling)
4. Consumer Discretionary — Weak, -1.8%, pressured by LULU and Tesla. (ATR -0.35%, falling)
5. Financials — Weak (specific % not disclosed); pressured by credit-bureau stock declines. (ATR 1.00%, falling)
6. Health Care — Weak (specific % not disclosed). (ATR 2.11%, falling)
7. Energy — Weak (specific % not disclosed). (ATR 2.50%, rising)
8. Materials — Weak (specific % not disclosed). (ATR 0.20%, falling)
9. Real Estate — Weak (specific % not disclosed). (ATR -1.75%, falling)
10. Consumer Staples — Weak (specific % not disclosed). (ATR 0.50%, flat)
11. Utilities — Not specifically flagged in today’s Industry Watch commentary. (ATR -2.01%, flat)
Key Earnings & Movers
- Adobe (ADBE) — $268.26, -$17.50 (-6.12%): Shares slid after announcing Anil Chakravarthy will become CEO on December 1, succeeding Shantanu Narayen, who moves to executive chair.
- Autodesk (ADSK) — $217.80, -$19.72 (-8.30%): Notable software-sector laggard alongside Adobe.
- Synopsys (SNPS) — $391.87, -$24.44 (-5.87%): Also weighed down amid broad software weakness.
- iShares GS Software ETF (IGV) — $104.68, -$2.27 (-2.12%): Reflects sector-wide software pressure.
- lululemon athletica (LULU) — $100.50, -$21.27 (-17.47%): Fell below $100 for the first time in years after a disappointing Q2 report and a second consecutive FY27 guidance cut.
- Fair Isaac (FICO) — $920.50, -$198.43 (-17.73%): Plunged after FHFA Director Bill Pulte said Fannie Mae/Freddie Mac will allow lenders to use VantageScore, intensifying competition.
- Equifax (EFX) — $173.45, -$15.64 (-8.27%): Dropped alongside credit-bureau peers on regulatory commentary.
- TransUnion (TRU) — $77.66, -$7.26 (-8.56%): Also lower despite co-owning VantageScore, amid talk of a possible “bi-merge” credit-report system.
- Tesla (TSLA) — $352.85, -$23.52 (-6.25%): Gave back all of Thursday’s rally.
- DocuSign (DOCU) — Trading higher after a Q2 beat; IAM platform now represents 15.1% of ARR, with FY27 ARR growth guidance raised to +8.5-9.0% from +8.25-8.75%.
Stock Spotlight
lululemon athletica (LULU) is the session’s most significant story, with shares falling below the psychologically important $100 level for the first time in several years, down $21.27 (-17.47%) to $100.50. While Q2 (July) EPS of $2.92 — which included a $0.86 tariff-refund benefit — actually topped the company’s prior guidance, revenue fell 4% year-over-year to $2.42 billion, missing expectations. The bigger issue was guidance: Q3 EPS and revenue projections came in well below expectations, and management cut FY27 guidance significantly for the second consecutive quarter.
Underlying the guidance cut was broad-based comp weakness — overall comps fell 9% (10% in constant currency), driven by traffic pressure in both North America (comps -12%, worsening from -5% in Q1) and internationally (-3% reported, -6% CC). China, once a growth engine, saw comps decline 8% in constant currency. Leggings, a core category, fell approximately 20%. Gross margin of 60.5% actually improved 200 bps year-over-year, but this included a 560-bp tariff-refund benefit; excluding that, underlying product margin and fixed-cost deleverage both weakened. Operating margin fell 190 bps to 18.8% despite the tariff boost. Management is responding with increased H2 marketing spend and a more aggressive product-chase strategy, but the guidance cut — arriving just ahead of a CEO transition — has clearly spooked investors.
Bond Market & Treasuries
Treasury yields rose sharply following the stronger-than-expected August jobs report before paring some of the move by midday. As of the 10:53 a.m. ET update:
- 2-year note: 4.37% (+4 bps)
- 3-year note: 4.45% (+4 bps)
- 5-year note: 4.54% (+3 bps)
- 10-year note: 4.78% (+2 bps), having earlier touched 4.80% before meeting resistance
- 30-year bond: 5.24% (unchanged)
The primary driver was the August Employment Situation report, which showed nonfarm payrolls up 162,000 (vs. 45,000 consensus), pushing the CME FedWatch Tool’s implied probability of a September rate hike to roughly 60%, up from about 50% a day earlier. Selling was led by the short end of the curve. USD/JPY traded at 156.18 and EUR/USD at 1.1615 as of the latest update.
Commodities
- WTI Crude Oil: $90.69/bbl, -0.7% (overnight/early session)
- Gold: $4,513.90/ozt, -0.6%
- Copper: $6.654/lb, -0.2%
- Silver: Not reported in available data
Overseas Markets
Overnight activity was relatively quiet in fixed income and mixed in economic data. In Japan, JGBs across all tenors extended their bounce off 2026 lows, and SoftBank priced a JPY1 trillion retail bond offering; Japan’s Finance Minister Katayama confirmed the FY27/28 budget will reach a record JPY143 trillion. Japan’s July Household Spending rose 0.5% m/m (expected +2.6%; prior -6.4%) but fell 3.6% yr/yr (expected -1.6%; prior -3.3%).
South Korea’s July Current Account surplus came in at $42.08 billion, down from a prior surplus of $49.73 billion. In Europe, Eurozone July Retail Sales fell 0.6% m/m (expected +0.3%; prior +0.2%) but rose 0.6% yr/yr (expected +1.1%; prior +1.4%). Germany’s July Factory Orders jumped 2.5% m/m (expected +0.3%; prior +3.7%). Italy’s July Retail Sales fell 0.4% m/m (expected -0.2%; prior -0.2%) but rose 0.8% yr/yr (prior +3.1%).
Other notable overseas headlines: the U.K. is looking to approve new North Sea oil drilling efforts, Volkswagen’s supervisory board approved a plan for up to 50,000 additional job cuts, and Norway’s sovereign wealth fund is reportedly looking to trim its U.S. Treasury allocation to 50% from 70% (per FT).
Economic Data
August Employment Situation Report (released 8:30 a.m. ET):
- Nonfarm payrolls: +162,000 (Briefing.com consensus: +45,000)
- Private sector payrolls: +127,000 (consensus: +45,000)
- July payrolls revised to +21,000 from -23,000; June revised to +31,000 from +20,000
- 3-month average payrolls: 71,000, up from 38,000
- Unemployment rate: 4.1% (consensus: 4.2%), unchanged from July
- Average hourly earnings: +0.3% (consensus: +0.3%); July revised up to +0.2% from +0.1%
- Average hourly earnings, 12-month: +3.1%, down from +3.2% in July
- Average workweek: 34.4 hours (consensus: 34.3)
- U6 (underemployment) rate: 7.7%, down from 7.9%
- Labor force participation rate: 61.6%, up from 61.4%
- Employment-population ratio: 59.1%, up from 58.9%
- Long-term unemployed (27+ weeks): 27.0% of total unemployed, up from 25.5% in July
Market Impact: The headline strength in payrolls was interpreted as a potential green light for the Fed to hike rates at the September 16 FOMC meeting, pushing the 2-year yield up to 4.39% intraday and the 10-year toward 4.80%. However, Briefing.com noted offsetting soft spots — the modest 3-month payroll average, moderating wage growth, and a rise in long-term unemployment — meaning a hike is “not assured” by this data alone.
Looking Ahead
The key event on the horizon remains the September 16 FOMC meeting, where markets are now pricing in an increased (~60%) probability of a 25-basis-point rate hike following today’s employment data. Investors will continue to monitor incoming Fed commentary for further clarity on the rate path. No additional specific next-session economic releases or earnings reports were identified in the available data set.