Market Summary
U.S. equities closed lower on Friday, September 4, capping a volatile week as a stronger-than-expected August Employment Report reshaped the interest-rate outlook just ahead of the September FOMC meeting. 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 dropped 77.07 points (-0.29%) to 26,528.04. Nonfarm payrolls surged 162,000 versus a 45,000 consensus, and the unemployment rate fell to 4.1%, pushing the CME FedWatch-implied probability of a September rate hike to roughly 60% from about 50% the day prior. Cleveland Fed President Beth Hammack added to the hawkish tone, stating “it’s time to act” on rates.
Beneath the modest index-level declines, 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, even as software names slumped (iShares GS Software ETF -2.2%). Consumer Discretionary, Energy, Materials, Health Care, Financials, Communication Services, Real Estate, and Consumer Staples all finished weak, with Tesla (-5.92%) and lululemon (-17.38%) weighing heavily on discretionary names, and Adobe (-6.73%) dragging on software after a CEO change announcement.
For the week, the major averages finished little changed despite substantial intraday volatility: the S&P 500 gained 0.1%, the Nasdaq rose 0.4%, and the DJIA slipped 0.3%. A near-10% surge in WTI crude tied to U.S.-Iran tensions pressured stocks early in the week, while a mid-week stabilization in yields and oil fueled a broad Thursday rebound that Friday’s hot jobs data partially unwound. The Russell 2000 (+19.9% YTD) and S&P Mid Cap 400 (+14.5% YTD) continue to lead major benchmarks year-to-date.
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):
- NYSE: Advancers 1,321 | Decliners 1,369 | Volume 987.83 mln
- 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
- % of Stocks Above 20-day SMA: 23%
- % of Stocks Above 40-day SMA: 49.91%
- 9-Month Bulls: 24 | Bears: 7 (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 by Friday session performance (Briefing.com Industry Watch):
1. Industrials +0.4% — boosted by spillover strength from semiconductors
2. Information Technology +0.2% — sharp internal split; semis rallied (PHLX +3.4%) while software fell (iShares GS Software ETF -2.2%)
3. Financials -0.8% — pressured by credit-bureau weakness (FICO, EFX, TRU)
4. Communication Services -0.9% — weakness in large-cap components
5. Consumer Discretionary -1.3% — Tesla (-5.92%) and lululemon (-17.38%) led declines
6. Energy — weak (no specific Friday figure provided)
7. Materials — weak (no specific Friday figure provided)
8. Health Care — weak (no specific Friday figure provided)
9. Real Estate — weak (no specific Friday figure provided)
10. Consumer Staples — weak (no specific Friday figure provided)
Weekly sector context: Energy +2.3% (best performer, oil-driven); Information Technology +1.1% (semis strength); Consumer Discretionary -2.1%; Materials -1.6%; Real Estate -1.3%; Industrials -1.1%; Financials unchanged for the week; Vanguard Mega Cap Growth ETF +0.1% for the week.
WaveFinder Sector ATR (volatility, 9/4/26): Energy 2.38% (rising, P47) — highest volatility; Health Care 1.99% (falling, P0); Communication Services 1.22% (falling, P16); Financials 0.90% (falling, P58); Real Estate -2.05% (falling, P0); Utilities -2.14% (flat, P32); Industrials -1.50% (falling, P16); Technology -0.92% (flat, P63); Consumer Discretionary -0.66% (falling, P0); Consumer Staples 0.16% (flat, P5); Materials 0.01% (falling, P0).
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, raising competitive pressure on FICO’s mortgage-scoring business.
- lululemon athletica (LULU) 100.61, -21.16 (-17.38%) — fell below $100 for the first time in years after Q2 revenue missed, comps fell 9%, and FY27 guidance was cut for a second straight quarter.
- Sandisk (SNDK) 1,740.00, +185.01 (+11.90%) — surged on stronger DRAM/NAND pricing and robust server demand.
- Tesla (TSLA) 354.08, -22.28 (-5.92%) — gave back Thursday’s rally.
- Adobe (ADBE) 266.51, -19.24 (-6.73%) — dropped after naming a new CEO.
- Equifax (EFX) 177.05, -12.04 (-6.37%) and TransUnion (TRU) 79.88, -5.04 (-5.94%) — fell alongside FICO on Pulte’s credit-scoring commentary and potential “bi-merge” system.
- Oracle (ORCL) 158.83, +4.79 (+3.11%) — reports earnings after Thursday’s close next week.
- DocuSign (DOCU) — traded higher following Q2 results; IAM platform adoption now 15.1% of ARR, FY27 ARR growth guidance raised to +8.5-9.0%.
Stock Spotlight
lululemon athletica (LULU) was the session’s most significant story, with shares falling 17.38% to $100.61 following a disappointing Q2 (July) report and a second consecutive FY27 guidance cut. While EPS of $2.92 topped guidance, it included an $0.86 benefit from tariff refunds and declined from $3.10 a year ago. Revenue fell 4% year-over-year to $2.42 billion, missing expectations, with overall comps down 9% (10% in constant currency) driven primarily by traffic weakness. Americas comps fell 12% (versus -5% in Q1), while China—previously a growth driver—saw comps decline 8% in constant currency.
Management cited negative media/social commentary and inconsistent product response, with the core leggings category down approximately 20%. Gross margin of 60.5% actually improved 200 bps year-over-year, but this included a 560-bp tariff-refund benefit; underlying product margin fell 150 bps on tariffs and markdowns, while fixed-cost deleverage cost another 230 bps. Operating margin declined 190 bps to 18.8% despite the tariff boost. LULU is ramping second-half marketing spend and increasing “chase” inventory volume by roughly 20% to address the slump, but the steep Q3 guidance cut has intensified investor concern ahead of the company’s CEO transition.
Bond Market & Treasuries
U.S. Treasuries sold off Friday after the stronger-than-expected jobs report reversed an initially higher open. The 10-year note yield rose 2 basis points to 4.784% (+6 bps for the week), briefly testing 4.80% intraday before meeting resistance. The 2-year yield climbed 5 basis points to 4.38% (+3 bps for the week).
Full Yield Curve:
- 2-yr: 4.38% (+5 bps day / +3 bps week)
- 3-yr: 4.45% (+4 bps day / +5 bps week)
- 5-yr: 4.55% (+4 bps day / +7 bps week)
- 10-yr: 4.78% (+2 bps day / +6 bps week)
- 30-yr: 5.25% (unchanged day / +4 bps week)
The 2s10s spread widened 3 basis points to 40 bps for the week, with notable weakness concentrated in the belly of the curve. The CME FedWatch Tool shows roughly a 60% implied probability of a 25-bp hike at the September 15-16 FOMC meeting, up sharply from ~50% pre-report. Separately, the U.S. Treasury sanctioned Golden Global investment bank over Iran dealings, and Norway’s sovereign wealth fund may trim U.S. Treasury holdings, per the FT.
Commodities
- WTI Crude Oil: $91.50/bbl, +$0.15 (+0.2%) — up roughly 10% for the week on U.S.-Iran tensions; weekly gain narrowed to $8.12/bbl by Friday.
- Gold: $4,476.00/ozt, -1.4%
- Copper: $6.68/lb, +0.2%
- Silver: not disclosed in available data.
Overseas Markets
No specific overseas equity index closing levels were provided in today’s data. Currency and economic releases from Asia/Europe included:
- USD/JPY: 156.22 (+0.3%)
- EUR/USD: 1.1612 (-0.1%)
- GBP/USD: 1.3515 (-0.1%)
- USD/CNH: 6.7084 (-0.1%)
- U.S. Dollar Index: rose 0.3% to 99.16 (trimmed weekly loss to -0.5%)
Key overnight data: Japan’s July Household Spending +0.5% m/m (vs. +2.6% expected) but -3.6% y/y; South Korea’s July Current Account surplus $42.08 bln (vs. prior $49.73 bln); Eurozone July Retail Sales -0.6% m/m (vs. +0.3% expected) but +0.6% y/y; Germany July Factory Orders +2.5% m/m (vs. +0.3% expected); Italy July Retail Sales -0.4% m/m but +0.8% y/y. Japan’s Finance Minister Katayama confirmed a record FY27/28 budget of JPY 143 trillion. The U.K. is reportedly pursuing new North Sea oil drilling approvals, and Volkswagen’s supervisory board approved plans for up to 50,000 additional job cuts.
Economic Data
August Employment Situation Report (released 8:30 ET):
- Nonfarm Payrolls: +162,000 (consensus +45,000); July revised to +21,000 from -23,000; June revised to +31,000 from +20,000
- Private Payrolls: +127,000 (consensus +45,000); July revised to +71,000 from +30,000
- Unemployment Rate: 4.1% (consensus 4.2%; prior 4.1%)
- Average Hourly Earnings: +0.3% m/m (consensus +0.2%); July revised to +0.2% from +0.1%; +3.1% y/y (down from +3.2%)
- Average Workweek: 34.4 hours (consensus 34.3; prior 34.3)
- Labor Force Participation Rate: rose to 61.6% from 61.4%
- U6 Unemployment Rate: fell to 7.7% from 7.9%
- Long-term unemployed (27+ weeks): rose to 27.0% of unemployed from 25.5%
Market Impact: The headline beat drove an immediate hawkish repricing, with September rate-hike odds jumping to ~60% from ~50%. However, the 3-month payroll average remained modest at 71,000, and rising long-term unemployment tempered the “hot” read, leaving some ambiguity about the Fed’s actual next move.
Looking Ahead
- Monday, Sept 7: Bond and equity markets closed for Labor Day.
- Tuesday, Sept 8: August NFIB Small Business Optimism Index (Briefing.com consensus 99.3; prior 99.8) at 6:00 ET; $58 billion 3-year Treasury note auction.
- Week Ahead: August Producer Price Index (PPI) (consensus +0.4%; prior 0.0%) and August Consumer Price Index (CPI) (consensus +0.4%; prior +0.1%) are the next major catalysts for shifting September FOMC rate-hike expectations.
- Earnings: Oracle (ORCL) reports after Thursday’s close; the holiday-shortened week is otherwise light on earnings.
- FOMC: The next Federal Open Market Committee meeting is scheduled for September 15-16, with markets currently pricing a ~58-60% probability of a 25-bp hike to 3.75-4.00%.