Market Summary
U.S. equities closed out a volatile week on a lower note Friday, September 4, as a stronger-than-expected August Employment Report reignited hawkish Fed expectations and interrupted the prior session’s broad advance. The S&P 500 fell 29.11 points (-0.38%) to 7718.60, the Dow Jones Industrial Average dropped 271.86 points (-0.51%) to 53414.25, and the Nasdaq Composite slipped 77.07 points (-0.29%) to 26528.04. The Russell 2000 (+0.3%) and S&P Mid Cap 400 (+0.1%) bucked the large-cap weakness, closing modestly higher on the day.
The dominant theme was a sharp repricing of September rate-hike odds. August Nonfarm Payrolls surged to 162,000 versus a Briefing.com consensus of just 45,000, while the unemployment rate fell to 4.1% and average hourly earnings rose 0.3%. The CME FedWatch Tool’s implied probability of a 25-basis-point hike at the September 15-16 FOMC meeting jumped to roughly 60% from about 50% a day earlier, a shift reinforced by hawkish remarks from voting FOMC member and Cleveland Fed President Beth Hammack, who said “it’s time to act” on rates. Treasury yields backed up across the curve in response, pressuring rate-sensitive equities.
Beneath the headline decline, sector rotation was pronounced. Information Technology (+0.2%) and Industrials (+0.4%) were the lone sectors in positive territory, powered by a 3.4% surge in the PHLX Semiconductor Index, even as software names sold off sharply (iShares GS Software ETF -2.2%). Consumer Discretionary, Communication Services, Financials, Energy, Materials, Health Care, Real Estate and Consumer Staples all finished weaker, with Consumer Discretionary (-1.3%) the laggard as Tesla and lululemon athletica both posted steep declines. For the week, the major averages finished little changed overall (S&P 500 +0.1%, Nasdaq +0.4%, DJIA -0.3%), masking a highly volatile stretch driven by surging oil prices, rising yields, and shifting Fed expectations.
Market Snapshot
| Index | Level | Change | % Change |
|—|—|—|—|
| Dow Jones | 53,414.25 | -271.86 | -0.51% |
| Nasdaq Composite | 26,528.04 | -77.07 | -0.29% |
| S&P 500 | 7,718.60 | -29.11 | -0.38% |
Breadth (NYSE): Advancers 1,321 | Decliners 1,369 | Volume 987.83 mln
Breadth (Nasdaq): Advancers 2,532 | Decliners 2,338 | Volume 6.54 bln
WaveFinder Market Breadth (as of 09/04/26):
- Primary Sentiment: Bullish | 4% Sentiment: Bullish | 40 SMA Sentiment: Neutral
- Primary Bulls 795 / Bears 535
- 4% Bulls 206 / Bears 104
- Stocks Above 20-day SMA: 23%
- Stocks Above 40-day SMA: 49.91%
- 9-Month Bulls 24 / Bears 7; Bull Follow-Through 30%
Breadth data suggests a market still constructive on a primary trend basis, but with only about a quarter of names holding above their 20-day moving average, indicating near-term technical softening beneath the surface.
Sector Performance
Ranked from strongest to weakest (Briefing.com Industry Watch classification with available performance figures):
1. Industrials — +0.4% (Strong; lifted by semiconductor-linked strength)
2. Information Technology — +0.2% (Strong; sharp internal split — semis rallied, software fell)
3. Communication Services — -0.9% (Weak)
4. Financials — -0.8% (Weak; pressured by credit-bureau selloff)
5. Consumer Discretionary — -1.3% (Weak; TSLA and LULU weighed heavily)
6. Energy — Weak (no specific % provided)
7. Materials — Weak (no specific % provided)
8. Health Care — Weak (no specific % provided)
9. Real Estate — Weak (no specific % provided)
10. Consumer Staples — Weak (no specific % provided)
Note: Full 11-sector GICS breakdown with precise percentages was not available for all groups in source data; Energy, Materials, Health Care, Real Estate, and Consumer Staples were flagged as “Weak” by Briefing.com without specific point changes.
Volatility context (WaveFinder Sector ATR): Energy shows the highest and rising ATR (2.47%, P47), suggesting elevated volatility potential, while Real Estate (-2.14%, falling) and Utilities (-2.21%, flat) show contracting volatility. Technology ATR is falling (-0.91%, P63) despite the day’s intra-sector dispersion.
Key Earnings & Movers
- Fair Isaac (FICO) 932.26, -186.67 (-16.68%) — Plunged after FHFA Director Bill Pulte said Fannie Mae/Freddie Mac will allow lenders to use VantageScore, intensifying competition for FICO’s mortgage-scoring business.
- lululemon athletica (LULU) 100.61, -21.16 (-17.38%) — Fell below $100 for the first time in years after a Q2 revenue miss and a second consecutive FY27 guidance cut.
- Equifax (EFX) 177.05, -12.04 (-6.37%) — Fell alongside FICO on credit-bureau competition concerns.
- TransUnion (TRU) 79.88, -5.04 (-5.94%) — Also pressured by Pulte’s comments on a potential “bi-merge” credit-reporting system.
- Adobe (ADBE) 266.51, -19.24 (-6.73%) — Declined after naming a new CEO, dragging on software sentiment.
- Tesla (TSLA) 354.08, -22.28 (-5.92%) — Gave back the prior session’s rally.
- SanDisk (SNDK) 1740.00, +185.01 (+11.90%) — Surged on stronger DRAM/NAND pricing, robust server demand, and a technical rebound.
- Oracle (ORCL) 158.83, +4.79 (+3.11%) — Gained ahead of its earnings report, due after Thursday’s close next week.
- DocuSign (DOCU) — Traded higher after Q2 beat and raised FY27 ARR growth guidance to +8.5-9.0% from +8.25-8.75%, driven by accelerating IAM adoption (now 15.1% of ARR).
Stock Spotlight
lululemon athletica (LULU) was among the session’s most consequential movers, tumbling 17.38% to $100.61 — its first sub-$100 print in years — after a disappointing Q2 (July) report and a second straight guidance cut. Revenue fell 4% year-over-year to $2.42 billion, missing expectations, while overall comparable sales declined 9% (10% in constant currency) on broad traffic weakness. Americas comps fell 12% (versus -5% in Q1), and China — previously a growth engine — reversed hard, with comps down 8% in constant currency. Leggings, a core category, declined roughly 20%.
While EPS of $2.92 topped guidance, it included an $0.86 benefit from tariff refunds; excluding that item, results still beat but declined from $3.10 a year ago. The real catalyst for the selloff was forward guidance: Q3 EPS and revenue guidance came in well below expectations, and management cut FY27 guidance significantly for the second consecutive quarter. Operating margin fell 190 basis points to 18.8% despite the tariff-refund tailwind, reflecting tariff costs, rising markdowns, and fixed-cost deleverage. Management is responding with increased H2 marketing spend and a more aggressive “chase” strategy on newer styles (chase volume up ~20% y/y), but the results — arriving amid an ongoing CEO transition — have intensified investor concern about the brand’s competitive positioning in its two largest markets.
Bond Market & Treasuries
Treasuries sold off Friday after opening with modest gains, reversing sharply following the stronger-than-expected August jobs data. Yield moves (with weekly changes in parentheses):
- 2-year: 4.38% (+5 bps day; +3 bps week)
- 3-year: 4.45% (+4 bps day; +5 bps week)
- 5-year: 4.55% (+4 bps day; +7 bps week)
- 10-year: 4.78% (+2 bps day; +6 bps week)
- 30-year: 5.25% (unchanged day; +4 bps week)
The 2s10s spread widened by 3 basis points on the week to 40 bps, with relative weakness concentrated in the belly of the curve. The 10-year yield briefly revisited 4.80% intraday before meeting resistance. Key drivers included the blowout August Nonfarm Payrolls print (162K vs. 45K consensus), an upward July revision (to +21K from -23K), stronger average hourly earnings (+0.3%), and hawkish commentary from Cleveland Fed President Beth Hammack. The CME FedWatch Tool now assigns roughly a 60% probability to a September rate hike, up from about 50% the prior day. The U.S. Dollar Index rose 0.3% to 99.16 (trimming its weekly loss to 0.5%), while USD/JPY rose 0.3% to 156.22 and EUR/USD slipped 0.1% to 1.1612.
Commodities
- WTI Crude Oil: $91.50/bbl, +$0.15 (+0.2%) — up roughly 10% for the week amid the ongoing U.S.-Iran conflict and Strait of Hormuz concerns; weekly gain narrowed to $8.12/bbl by Friday.
- Gold: $4,476.00/ozt, -1.4%
- Copper: $6.68/lb, +0.2%
Overseas Markets
Specific index-level data for Asian and European equity markets was not available in today’s dataset; however, key overseas developments included:
- Japan: Finance Minister Katayama confirmed the FY27/28 budget will reach a record JPY 143 trillion. July Household Spending rose 0.5% m/m (vs. 2.6% expected) but fell 3.6% y/y (vs. -1.6% expected).
- South Korea: July Current Account surplus totaled $42.08 billion, down from $49.73 billion previously.
- Eurozone: July Retail Sales fell 0.6% m/m (vs. +0.3% expected) but rose 0.6% y/y.
- Germany: July Factory Orders rose 2.5% m/m, well above the 0.3% consensus.
- Italy: July Retail Sales fell 0.4% m/m but rose 0.8% y/y.
- U.K.: Reportedly moving to approve new oil drilling efforts in the North Sea.
- Corporate: Volkswagen’s supervisory board approved a plan for up to 50,000 additional job cuts.
- Geopolitical/Regulatory: The U.S. Treasury sanctioned Golden Global investment bank over Iran-related dealings; Norway’s sovereign wealth fund may trim U.S. Treasury holdings, per the FT.
Economic Data
August Employment Situation Report (released Friday, Sept. 4):
- Nonfarm Payrolls: +162,000 (consensus +45,000); July revised up to +21,000 from -23,000; June revised to +31,000 from +20,000
- 3-month average payroll growth: 71,000 (up from 38,000)
- Private Payrolls: +127,000 (consensus +45,000)
- Unemployment Rate: 4.1% (consensus 4.2%), unchanged from July
- U6 (underemployment) Rate: 7.7%, down from 7.9%
- Average Hourly Earnings: +0.3% m/m (consensus +0.3%); +3.1% y/y, down from +3.2%
- Average Workweek: 34.4 hours (consensus 34.3), up from 34.3
- Labor Force Participation Rate: 61.6%, up from 61.4%
- Long-term unemployed (27+ weeks): 27.0% of total unemployed, up from 25.5%
Market Impact: The headline strength drove a sharp hawkish repricing in rate expectations, pushing September hike odds to ~60% and lifting yields across the curve. However, softer underlying details — a still-modest 71,000 three-month payroll average, decelerating wage growth, and rising long-term unemployment — kept the report from fully cementing hike expectations, leaving room for the upcoming inflation data to be the deciding factor.
Looking Ahead
- Monday: U.S. bond and equity markets closed for Labor Day.
- Tuesday: August NFIB Small Business Optimism Index (consensus 99.3; prior 99.8) at 6:00 ET; $58 billion 3-year Treasury note auction.
- September 11: August Consumer Price Index (CPI) — consensus +0.4% m/m, following July’s +0.1% reading. This report is expected to be decisive for finalizing September FOMC rate-hike expectations.
- August PPI also due next week (consensus +0.4%; prior 0.0%).
- September 15-16: FOMC Meeting — market currently pricing roughly 60% odds of a 25-bp rate hike to 3.75-4.00%.
- Earnings: Oracle (ORCL) reports after Thursday’s close; the holiday-shortened week is otherwise light on major earnings.
- Watch Items: Continued dispersion between semiconductor strength and software weakness within Technology; credit-bureau stocks (FICO, EFX, TRU) following regulatory commentary from FHFA; LULU’s post-earnings stabilization amid CEO transition; oil price trajectory tied to U.S.-Iran developments.