Market Summary
U.S. equities closed out a volatile week on a soft note Friday, September 4, as a stronger-than-expected August Employment Report reignited fears of a September Fed rate hike. The S&P 500 fell 29.11 points (-0.38%) to 7,718.60, the Dow shed 271.86 points (-0.51%) to 53,414.25, and the Nasdaq Composite declined 77.07 points (-0.29%) to 26,528.04. Small- and mid-caps bucked the weakness, with the Russell 2000 (+0.3%) and S&P Mid Cap 400 (+0.1%) posting modest gains.
The primary catalyst was the August jobs data: nonfarm payrolls surged 162,000 versus a Briefing.com consensus of just 45,000, while the unemployment rate fell to 4.1%. The report pushed the CME FedWatch-implied probability of a 25-bp September rate hike to roughly 60%, up sharply from about 50% the day prior, sending the 10-year Treasury yield briefly toward 4.80% before it settled at 4.78% (+2 bps). Cleveland Fed President Beth Hammack reinforced the hawkish tone, stating “it’s time to act” on rates.
Beneath the surface, sector rotation was pronounced. Information Technology (+0.2%) and Industrials (+0.4%) were the only sectors in positive territory, powered by a 3.4% surge in the PHLX Semiconductor Index (led by Sandisk’s 11.9% spike), even as software names were hammered — the iShares Expanded Tech-Software ETF fell 2.2% after Adobe’s CEO transition news. Consumer Discretionary (-1.3%) was the weakest sector as Tesla reversed Thursday’s rally (-5.92%) and lululemon collapsed 17.38% on a disappointing Q2 and guidance cut. For the week, the major averages finished essentially flat (S&P 500 +0.1%, Nasdaq +0.4%, DJIA -0.3%) after a wild stretch driven by an ~10% surge in WTI crude and shifting rate 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/Nasdaq, 09/04):
- NYSE: Advancers 1,321 / Decliners 1,369 | Volume 987.83 mln
- Nasdaq: Advancers 2,532 / Decliners 2,338 | Volume 6.54 bln
WaveFinder Breadth Indicators (09/04):
- Primary Sentiment: Bullish (Bulls 795 / Bears 535)
- 4% Sentiment: Bullish (Bulls 206 / Bears 104)
- 40 SMA Sentiment: Neutral
- Stocks Above 20-day SMA: 23%
- Stocks Above 40-day SMA: 49.91%
- 9-Month Bulls: 24 / Bears: 7 (Bull Follow-Through: 30%)
YTD Performance: Russell 2000 +19.9% | S&P Mid Cap 400 +14.5% | Nasdaq Composite +14.1% | S&P 500 +12.8% | DJIA +11.1%
Sector Performance
Ranked from strongest to weakest (per Briefing.com Industry Watch):
1. Industrials +0.4% — Strong; boosted by semiconductor-linked strength
2. Information Technology +0.2% — Strong; sharply divided internally (PHLX Semiconductor Index +3.4% vs. software ETF -2.2%)
3. Financials -0.8% — Weak; credit-bureau names hit hard
4. Communication Services -0.9% — Weak; largest components lagged
5. Consumer Discretionary -1.3% — Weak; Tesla and lululemon led declines
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)
11. Utilities — Not specified in today’s Industry Watch data
Note: Weekly sector wrap showed Energy +2.3% (best performer for the week on oil strength), Consumer Discretionary -2.1% (week), Materials -1.6% (week), Real Estate -1.3% (week), Industrials -1.1% (week), and Financials flat (week).
Key Earnings & Movers
- lululemon athletica (LULU) — $100.61, -$21.16 (-17.38%): Q2 revenue fell 4% yr/yr to $2.42 bln (below expectations); overall comps -9%; second consecutive quarter of significant FY27 guidance cuts; shares fell below $100 for first time in years.
- FICO (FICO) — $932.26, -$186.67 (-16.68%): Plunged after FHFA Director Bill Pulte said Fannie Mae/Freddie Mac will allow all lenders to use VantageScore, increasing competition for FICO’s mortgage-scoring business.
- Sandisk (SNDK) — $1,740.00, +$185.01 (+11.90%): Surged on stronger DRAM/NAND pricing, robust server demand, and broader semiconductor strength.
- Tesla (TSLA) — $354.08, -$22.28 (-5.92%): Gave back prior day’s rally.
- Equifax (EFX) — $177.05, -$12.04 (-6.37%): Fell alongside FICO on credit-scoring 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.
- Oracle (ORCL) — $158.83, +$4.79 (+3.11%): Reports earnings after Thursday’s close next week.
- DocuSign (DOCU) — Trading higher post-Q2 report; IAM platform now 15.1% of ARR; raised FY27 ARR growth outlook to +8.5–9.0% from +8.25–8.75%.
Stock Spotlight
lululemon athletica (LULU) delivered the session’s most consequential move, plunging 17.38% to $100.61 after a disappointing Q2 (July) report and a second consecutive significant guidance cut. While EPS of $2.92 (including a $0.86 tariff-refund benefit) topped prior guidance, revenue fell 4% yr/yr to $2.42 billion, missing expectations. Comps declined 9% overall (10% in constant currency), with Americas comps down 12% (versus -5% in Q1) and China — previously a growth driver — swinging to an 8% comp decline in constant currency. Leggings, a core category, fell approximately 20%.
The guidance cut compounds concerns heading into LULU’s CEO transition. Q3 EPS and revenue guidance came in well below expectations, and management cited persistent traffic weakness, inconsistent product response, and negative media/social commentary as ongoing headwinds. Gross margin of 60.5% (+200 bps yr/yr) was flattered by a 560-bp tariff-refund benefit, masking a 150-bp decline in underlying product margin from tariffs and markdowns; operating margin fell 190 bps to 18.8% despite the refund benefit. LULU is responding with increased H2 marketing investment and a more aggressive product-chase strategy (chase volume up ~20% yr/yr), but the scale of the guidance reduction — the second straight quarter — has clearly rattled investor confidence.
Bond Market & Treasuries
Treasuries finished the week lower after the stronger-than-expected August jobs report reversed an initially firmer session.
| Tenor | Yield | Daily Change | Weekly Change |
|—|—|—|—|
| 2-Year | 4.38% | +5 bps | +3 bps |
| 3-Year | 4.45% | +4 bps | +5 bps |
| 5-Year | 4.55% | +4 bps | +7 bps |
| 10-Year | 4.78% (4.784%) | +2 bps | +6 bps |
| 30-Year | 5.25% | Unchanged | +4 bps |
- 2s10s spread widened by 3 bps this week to 40 bps.
- The 10-yr yield briefly touched 4.80% intraday before meeting resistance.
- CME FedWatch implied probability of a September rate hike rose to ~58-60% from ~49.4% a day earlier.
- Key driver: August jobs data (Nonfarm Payrolls +162K vs. 45K consensus).
- Notable news: U.S. Treasury sanctioned Golden Global investment bank over Iran dealings; Norway’s sovereign wealth fund may trim UST holdings per FT.
Commodities
- WTI Crude Oil: $91.50/bbl, +$0.15 (+0.2%) — gained ~10% for the week amid U.S.-Iran tensions; weekly gain narrowed to $8.12/bbl.
- Gold: $4,476.00/ozt, -1.4%
- Copper: $6.68/lb, +0.2%
- Silver: Not disclosed in available data
Currencies:
- EUR/USD: 1.1612 (-0.1%)
- GBP/USD: 1.3515 (-0.1%)
- USD/CNH: 6.7084 (-0.1%)
- USD/JPY: 156.22 (+0.3%)
- U.S. Dollar Index: 99.16, +0.3% daily (-0.5% for the week)
Overseas Markets
Specific index-level data for Asian and European equities was not provided in the available data; the following macro/news items were noted as influences:
- Japan: July Household Spending +0.5% m/m (expected +2.6%; prior -6.4%), but -3.6% yr/yr (expected -1.6%; prior -3.3%). FinMin Katayama confirmed FY27/28 budget will reach a record JPY 143 trillion.
- South Korea: July Current Account surplus of $42.08 bln (prior surplus $49.73 bln).
- Eurozone: July Retail Sales -0.6% m/m (expected +0.3%; prior +0.2%), +0.6% yr/yr (expected +1.1%; prior +1.4%).
- Germany: July Factory Orders +2.5% m/m (expected +0.3%; prior +3.7%).
- Italy: July Retail Sales -0.4% m/m (expected +0.2%; prior -0.2%), +0.8% yr/yr (prior +3.1%).
- U.K.: Reportedly looking 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.
Economic Data
August Employment Situation Report (released 09/04):
- Nonfarm Payrolls: +162,000 (consensus +45,000); July revised to +21,000 from -23,000; June revised to +31,000 from +20,000
- Private Sector Payrolls: +127,000 (consensus +45,000); July revised to +71,000 from +30,000
- 3-month average payroll growth: 71,000 (up from 38,000)
- Unemployment Rate: 4.1% (consensus 4.2%; prior 4.1%)
- U6 Unemployment Rate: 7.7% (down from 7.9%)
- Average Hourly Earnings: +0.3% m/m (consensus +0.2%; July revised to +0.2% from +0.1%); +3.1% yr/yr (vs. +3.2% prior)
- Average Workweek: 34.4 hours (consensus 34.3; prior 34.3)
- 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 unemployed (up from 25.5%)
Market Impact: The headline payroll beat was interpreted as increasing the odds of a September Fed rate hike, sending the 10-yr yield toward 4.80% and pressuring equities. However, softer underlying details (modest 3-month payroll average, decelerating wage growth on a yr/yr basis, and rising long-term unemployment) suggest a hike is not assured.
Looking Ahead
- Monday, Sept 7: Bond and equity markets closed for Labor Day.
- Tuesday, Sept 8: August NFIB Small Business Optimism Index (consensus 99.3; prior 99.8) at 6:00 ET; $58 billion 3-year Treasury note auction.
- Later in the week: August Producer Price Index (PPI) (consensus +0.4%; prior 0.0%) and August Consumer Price Index (CPI) (consensus +0.4%; prior +0.1%) — both key inputs for September FOMC rate-hike expectations.
- Earnings: Oracle (ORCL) reports after Thursday’s close; otherwise an abbreviated, earnings-light week.
- FOMC: Next meeting scheduled for September 15-16; markets will look to the CPI report (Sept 11, per Big Picture commentary) to further calibrate rate-hike probabilities ahead of the meeting.