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 expectations for a September rate hike and interrupted the market’s midweek rebound. 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 declined 77.07 points (-0.29%) to 26528.04. The Russell 2000 (+0.3%) and S&P Mid Cap 400 (+0.1%) bucked the trend with modest gains, highlighting a session where small- and mid-caps outperformed large-cap benchmarks.
The dominant narrative was a hawkish repricing of Fed policy expectations after nonfarm payrolls surged to 162,000 versus a Briefing.com consensus of just 45,000, alongside a lower-than-expected 4.1% unemployment rate. The CME FedWatch Tool’s implied probability of a September rate hike jumped to roughly 60% from about 50% the prior day, sending the 2-year yield up 5 bps to 4.38% and the 10-year yield up 2 bps to 4.78% (after touching 4.80% intraday). Cleveland Fed President Beth Hammack reinforced 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 sold off sharply (iShares GS Software ETF -2.2%). Consumer Discretionary was the weakest sector amid a 5.92% slide in Tesla and a 17.38% collapse in lululemon following disappointing earnings. Credit-scoring names (FICO, Equifax, TransUnion) were also hit hard on regulatory headlines from FHFA Director Bill Pulte. For the week, the major averages finished little changed: the Nasdaq gained 0.4%, the S&P 500 rose 0.1%, the Dow slipped 0.3%, while a ~10% surge in WTI crude and elevated yields whipsawed sentiment throughout the week.
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 (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/Bears: 24 / 7 (Follow-Through: 30%)
Sector Performance
Ranked by available daily performance data (Briefing.com Industry Watch + narrative detail):
1. Industrials +0.4% — Strong; lifted by spillover semiconductor strength
2. Information Technology +0.2% — Strong; sharp internal split (semis +3.4% PHLX vs. software -2.2% GS Software ETF)
3. Financials -0.8% — Weak; pressured by credit-scoring stock declines
4. Communication Services -0.9% — Weak; largest components lagged
5. Consumer Discretionary -1.3% — Weak; Tesla (-5.92%) and LULU (-17.38%) weighed heavily
6. Energy — Weak (specific daily % not disclosed)
7. Materials — Weak (specific daily % not disclosed)
8. Health Care — Weak (specific daily % not disclosed)
9. Real Estate — Weak (specific daily % not disclosed)
10. Consumer Staples — Weak (specific daily % not disclosed)
(Sector classification per Briefing.com Industry Watch; precise % changes not available for Energy, Materials, Health Care, Real Estate, and Consumer Staples in source data.)
WaveFinder Sector Volatility (ATR): Energy leads volatility at 2.47% (rising, P47), followed by Health Care at 2.05% (falling, P16) and Communication Services at 1.26% (falling, P21). Real Estate (-2.14%) and Utilities (-2.21%) show the lowest/falling ATR readings, both trending flat-to-falling.
Key Earnings & Movers
- Sandisk (SNDK) $1,740.00, +$185.01 (+11.90%) — Surged on stronger DRAM/NAND pricing, robust server demand, and broad semiconductor strength
- FICO $932.26, -$186.67 (-16.68%) — Tumbled after FHFA Director Bill Pulte said Fannie Mae/Freddie Mac will allow lenders to use VantageScore, threatening FICO’s mortgage-scoring dominance
- lululemon athletica (LULU) $100.61, -$21.16 (-17.38%) — Plunged below $100 after Q2 miss and steep guidance cut (see Spotlight)
- Tesla (TSLA) $354.08, -$22.28 (-5.92%) — Gave back prior day’s rally
- Adobe (ADBE) $266.51, -$19.24 (-6.73%) — Fell after naming a new CEO
- Equifax (EFX) $177.05, -$12.04 (-6.37%) — Dropped on credit-bureau regulatory concerns
- TransUnion (TRU) $79.88, -$5.04 (-5.94%) — Fell alongside EFX/FICO on Pulte’s “bi-merge” credit-report comments
- Oracle (ORCL) $158.83, +$4.79 (+3.11%) — Higher ahead of Thursday’s after-close earnings report
- DocuSign (DOCU) — Trading higher on Q2 upside and accelerating IAM (Intelligent Agreement Management) adoption, now 15.1% of ARR; FY27 ARR growth guidance raised to +8.5-9.0% from +8.25-8.75% (specific price/% change not disclosed in source data)
Stock Spotlight
lululemon athletica (LULU): $100.61, -$21.16 (-17.38%)
Lululemon shares fell below $100 for the first time in several years after a disappointing Q2 (July) report accompanied by a second consecutive quarterly cut to FY27 guidance. While EPS of $2.92 topped prior guidance, it included a $0.86 tariff-refund benefit and declined from $3.10 a year ago; revenue fell 4% yr/yr to $2.42 billion, missing expectations. Total comparable sales declined 9% (10% in constant currency), driven primarily by traffic weakness — Americas comps fell 12% (versus -5% in Q1), while China, formerly a growth driver, saw comps down 8% in CC. The core leggings category declined approximately 20%.
Margin pressure compounded the traffic problem: gross margin of 60.5% benefited from a 560-bp tariff-refund tailwind, masking a 150-bp decline in underlying product margin from tariffs and markdowns, plus 230 bps of fixed-cost deleverage. Operating margin fell 190 bps to 18.8% despite the tariff benefit. Management is responding with heavier H2 marketing investment and a ~20% increase in “chase” inventory volume to capture stronger-performing styles, but with Q3 guidance well below expectations and a CEO transition looming, investor confidence in a near-term turnaround remains fragile.
Bond Market & Treasuries
U.S. Treasuries sold off Friday after opening modestly higher, reversing sharply on the stronger-than-expected jobs report. The 10-year note yield rose 2 bps to 4.784% (+6 bps for the week), briefly testing 4.80% intraday before meeting resistance. The 2-year yield rose 5 bps 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 bps to 40 bps on the week, reflecting relative weakness in the belly of the curve. Rate-hike odds for the September 15-16 FOMC meeting rose to roughly 58-60% from ~49-50% pre-report. Additional pressure came from reports that Norway’s sovereign wealth fund may trim Treasury holdings, and the U.S. Treasury’s sanctioning of Golden Global investment bank over Iran dealings.
Commodities
| Commodity | Price | Change |
|—|—|—|
| WTI Crude | $91.50/bbl | +$0.15 (+0.2%) |
| Gold | $4,476.00/ozt | -1.4% |
| Copper | $6.68/lb | +0.2% |
Crude gained roughly 10% for the week amid U.S.-Iran tensions and Strait of Hormuz concerns, though Friday saw only a modest lack of new developments. Weekly crude gain narrowed to $8.12/bbl by session’s end. The U.S. Dollar Index rose 0.3% to 99.16 Friday, trimming its weekly loss to 0.5%. (Silver pricing not available in source data.)
Overseas Markets
Specific Asia/Europe index levels were not disclosed in source data; however, key overseas economic releases and developments included:
- 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%); Finance Minister Katayama confirmed FY27/28 budget will reach a record JPY 143 trillion
- South Korea: July Current Account surplus of $42.08 billion (down from $49.73 billion prior)
- Eurozone: July Retail Sales -0.6% m/m (expected +0.3%; prior +0.2%) but +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%) but +0.8% yr/yr (prior +3.1%)
- Corporate: Volkswagen’s supervisory board approved a plan for up to 50,000 additional job cuts; U.K. is looking to approve new North Sea oil drilling efforts
Currency moves: EUR/USD -0.1% to 1.1612; GBP/USD -0.1% to 1.3515; USD/JPY +0.3% to 156.22; USD/CNH -0.1% to 6.7084.
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); 3-month average payroll growth rose to 71,000 from 38,000
- 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 0.2%); July revised up to +0.2% from +0.1%; +3.1% yr/yr (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%
- Employment-Population Ratio: 59.1%, up from 58.9%
- Long-term unemployed (27+ weeks): 27.0% of unemployed, up from 25.5% in July
Market Impact: The headline beat drove an immediate hawkish repricing of Fed rate-hike odds (to ~58-60% for September), even as underlying details (soft 3-month payroll average, moderating wage growth, rising long-term unemployment) suggested the case for a hike is not fully 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
- Thursday: Oracle (ORCL) reports earnings after the close — one of the few notable reports in an otherwise light earnings week
- September 11: August Consumer Price Index (CPI) release — critical for solidifying September rate-hike expectations
- Also ahead: August Producer Price Index (PPI) (consensus 0.4%; prior 0.0%) and CPI (consensus 0.4%; prior 0.1%)
- September 15-16: FOMC meeting — markets currently pricing ~58-60% probability of a 25-bp rate hike to 3.75-4.00%