NYSE MAC Desk
Market Update
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo
Published on 9/02/2025
DOW 45,203 (-342), S&P 500 6,396 (-65), Russell 2000 2,345 (-21), NYSE FANG+ 15,122 (-175), ICE Brent Crude $69.22/barrel (+$1.74), Gold $3,591/oz (+$75), Bitcoin ~110.9k (+2504)
Welcome back. September is starting off true to form as the worst month for equities historically. Though stocks are down today, they’re probably doing better than Belichick and DeBoer did this weekend. The S&P 500 is down 1% and the losses are being spread democratically as the equal-weight and Russell 2000 are matching that performance. The turn of seasonality and expanding uncertainties in the global fiscal, policy and geopolitical arenas are likely weighing on a market that had managed to hold its nose as it marched to new record highs just last week. A highly publicized meeting over the weekend between Xi, Putin and Modi is the latest ingredient thrown into this simmering broth of uncertainty.
Speaking of last week, US equities ended Friday lower, with the S&P 500 failing to hold the record 6500 level. Late last week an appeals court struck down President Trump’s reciprocal tariffs while allowing them to remain in place until mid-October, but this looks like it’s going all the way to the Supreme Court.
Tech is the weakest sector today, and semis in particular (NVDA -3%). Lam Research caught a downgrade to Underperform from Morgan Stanley, and TSMC became the latest equipment maker to be notified by the US government that fast-track authorization to ship equipment to its fab in China will be revoked. The company will now need to be issued export licenses. Similar revocations for Samsung and SK Hynix were issued last week. Industrials are broadly weaker, especially freight, logistics and electrical equipment names. Real Estate and Utilities are also among the laggards with the backup in yields.
The best sectors today are struggling to stay flat- Staples, Energy (oil higher) and Healthcare (biotech, managed care +ve). In corporate news, Constellation Brands is under pressure after issuing an update to its outlook, citing “incremental macroeconomic headwinds affecting consumer demand.” PepsiCo is trading higher after activist Elliott Management was reported to have built a $4B position. Air Lease is higher on news it will be acquired by a group formed by Sumitomo, SMBC Aviation Capital, Apollo and Brookfield for and equity value of $7.4B, EV of $28.2B. Earnings will pick up tomorrow with Macy’s, J.Jill and Dollar Tree reporting in the morning for the retail space, while tech names Hewlett Packard Enterprise and Salesforce report after the close. And in the most important news of the day...Happy Birthday Nolan!
Indexes and Sectors
Treasuries are under pressure, pushing yields higher (2yr +3bp, 30yr +5bp). That’s a global phenomenon as long-term yields across the globe reach multi-year to multi-decade highs. The Dollar is stronger versus the Euro and Yen.
Government Yields
Other assets
The August ISM Manufacturing index was the main piece of economic data, and came in at 48.7, slightly below consensus of 49.0 but above last month’s 48.0. New Orders rose from 47.1 to 51.4. Prices continued to expand but at a lesser pace, at 63.7 down from 64.8 las month. The commentary in the report was rather pessimistic:
In other data, the S&P Manufacturing PMI was revised lower, from the 53.3 flash, to 53.0. July Construction spending fell 0.1% versus June, inline with estimates. Residential construction rose 0.1% m.m, while Nonresidential fell 0.5%. On a y.y basis, Residential fell 5.1% and Nonresidential fell 1.1%. Office construction, where data centers sit, was unchanged m.m and down 0.3% y.y. Power construction fell 0.4% m.m but was up 2.0% y.y.
The LMI Logistics Managers Index was 59.3, just above last month’s 59.2 reading (>50 = expansion). According to the report inventory levels and costs are rising, warehouse capacity is only marginally expanding. Meanwhile transportation capacity is rising faster than prices and utilization, a metric to keep an eye on, as a more durable trend could be a prelude to a slowdown in the transportation market.
Quick recap of international markets from Monday: Japan’s Nikkei was down 1.2% with weakness in tech stocks. China markets were higher (Hang Seng +2%, Shanghai +0.5%). China’s official PMIs were about inline with consensus but in contraction territory for manufacturing (49.4), while non-manufacturing were just within expansion territory (50.3), slightly above expectations and last month. The private PMI, formerly Caixin and now issued under DataDog, fared better, coming in at 50.5 versus consensus and last month’s 49.5 reading. Europe was mostly higher on Monday. Final Eurozone PMIs came in above the flash readings, with manufacturing hitting a 3-year high and most countries seeing improvement versus last month.
Last night the Nikkei was up 0.2%. A 10yr JGB auction was uneventful but yields have hit their highest level since July 2008. A review of the LDP’s big parliament losses in July is due and with it the future of the government. Chinese markets were lower overnight after Monday’s sharp gains. If you’re a fan of military hardware, China will be putting on its largest military parade ever tomorrow. Russia and China agreed to a new energy deal where Russia will increase gas supplies via existing and new pipelines.
Europe was down sharply as the DAX fell 2.3% and the STOXX 600 fell 1.5%. Political turmoil and significant long-term yield moves are creating storm clouds on the horizon. Politico reported that European Socialists, the second largest group in the European Parliament, are mobilizing to oppose the US-EU trade deal. In France, it looks more likely that the government will collapse and snap elections will occur should a confidence vote on September 8 go against the ruling government. As the political machine turns, long-term yields are hitting multi-decade highs: The French 30y is at 2009 levels, Germany is at its highest since 2011 and the UK is at levels not seen since 1998 as the country relives the short-lived Truss epoch in 2022.
European headline CPI ticked up from 2.0% to 2.1% this month, just above consensus. Core was unchanged at 2.3% and also slightly above consensus. The political process continues in France, which is trying to prevent the collapse of the ruling government and a September 8 confidence vote. There’s been recent focus on reforms to the Dutch pension system, likely coming at the end of this year, which could cause waves in European bond markets, and ultimately boost demand for US treasuries.
Global Indexes
Earnings:
Economic Data:
- Equities falling in the unofficial start to Fall
- Most sectors lower; Staples, Energy, Healthcare trying to stay positive
- Treasury yields moving higher across the globe
- The uncertainty list is growing
- Check out some of the recent ICE Data/Content:
- New! Biotech Series: Alto Neuroscience CEO Dr. Amit Etkin on the Next Chapter in Mental Health Treatment
- Inside the ICE House: Ep. 483: W&T Offshore CEO Tracy Krohn on Steering Oil & Gas Exploration Through Industry Transformation
- ICE First Look at Mortgage Performance: Delinquencies Ease in July as Foreclosure Activity Edges Higher
Welcome back. September is starting off true to form as the worst month for equities historically. Though stocks are down today, they’re probably doing better than Belichick and DeBoer did this weekend. The S&P 500 is down 1% and the losses are being spread democratically as the equal-weight and Russell 2000 are matching that performance. The turn of seasonality and expanding uncertainties in the global fiscal, policy and geopolitical arenas are likely weighing on a market that had managed to hold its nose as it marched to new record highs just last week. A highly publicized meeting over the weekend between Xi, Putin and Modi is the latest ingredient thrown into this simmering broth of uncertainty.
Speaking of last week, US equities ended Friday lower, with the S&P 500 failing to hold the record 6500 level. Late last week an appeals court struck down President Trump’s reciprocal tariffs while allowing them to remain in place until mid-October, but this looks like it’s going all the way to the Supreme Court.
Tech is the weakest sector today, and semis in particular (NVDA -3%). Lam Research caught a downgrade to Underperform from Morgan Stanley, and TSMC became the latest equipment maker to be notified by the US government that fast-track authorization to ship equipment to its fab in China will be revoked. The company will now need to be issued export licenses. Similar revocations for Samsung and SK Hynix were issued last week. Industrials are broadly weaker, especially freight, logistics and electrical equipment names. Real Estate and Utilities are also among the laggards with the backup in yields.
The best sectors today are struggling to stay flat- Staples, Energy (oil higher) and Healthcare (biotech, managed care +ve). In corporate news, Constellation Brands is under pressure after issuing an update to its outlook, citing “incremental macroeconomic headwinds affecting consumer demand.” PepsiCo is trading higher after activist Elliott Management was reported to have built a $4B position. Air Lease is higher on news it will be acquired by a group formed by Sumitomo, SMBC Aviation Capital, Apollo and Brookfield for and equity value of $7.4B, EV of $28.2B. Earnings will pick up tomorrow with Macy’s, J.Jill and Dollar Tree reporting in the morning for the retail space, while tech names Hewlett Packard Enterprise and Salesforce report after the close. And in the most important news of the day...Happy Birthday Nolan!
Indexes and Sectors
Treasuries are under pressure, pushing yields higher (2yr +3bp, 30yr +5bp). That’s a global phenomenon as long-term yields across the globe reach multi-year to multi-decade highs. The Dollar is stronger versus the Euro and Yen.
Government Yields
- US 2yr +3bps to 3.65%, 5yr +4bps to 3.74%, 10yr +5bps to 4.28%, 30yr +5bps to 4.97%
- USD index: +$0.55 to $98.24
Other assets
The August ISM Manufacturing index was the main piece of economic data, and came in at 48.7, slightly below consensus of 49.0 but above last month’s 48.0. New Orders rose from 47.1 to 51.4. Prices continued to expand but at a lesser pace, at 63.7 down from 64.8 las month. The commentary in the report was rather pessimistic:
- “A 50-percent tariff on imports from Brazil… means certified organic cane sugar — and everything made with it — is about to get significantly more expensive.” - Food, Beverage & Tobacco
- “Orders across most product lines have decreased. Financial expectations for the rest of 2025 have been reduced.” - Chemical Products
- “…Our materials/supplies are now rising in price, so our sell pricing is again being reviewed to ensure we keep a sustainable margin...” - Computer & Electronic Products
- “The trucking industry continues to contract. Our backlog continues to shrink as customers continue to hold off on buying new equipment. This current environment is much worse than the Great Recession of 2008-09. There is absolutely no activity in the transportation equipment industry.” - Transportation Equipment
- “We’ve implemented our second price increase. ‘Made in the USA’ has become even more difficult due to tariffs on many components.” - Electrical Equipment, Appliances & Components
In other data, the S&P Manufacturing PMI was revised lower, from the 53.3 flash, to 53.0. July Construction spending fell 0.1% versus June, inline with estimates. Residential construction rose 0.1% m.m, while Nonresidential fell 0.5%. On a y.y basis, Residential fell 5.1% and Nonresidential fell 1.1%. Office construction, where data centers sit, was unchanged m.m and down 0.3% y.y. Power construction fell 0.4% m.m but was up 2.0% y.y.
The LMI Logistics Managers Index was 59.3, just above last month’s 59.2 reading (>50 = expansion). According to the report inventory levels and costs are rising, warehouse capacity is only marginally expanding. Meanwhile transportation capacity is rising faster than prices and utilization, a metric to keep an eye on, as a more durable trend could be a prelude to a slowdown in the transportation market.
Quick recap of international markets from Monday: Japan’s Nikkei was down 1.2% with weakness in tech stocks. China markets were higher (Hang Seng +2%, Shanghai +0.5%). China’s official PMIs were about inline with consensus but in contraction territory for manufacturing (49.4), while non-manufacturing were just within expansion territory (50.3), slightly above expectations and last month. The private PMI, formerly Caixin and now issued under DataDog, fared better, coming in at 50.5 versus consensus and last month’s 49.5 reading. Europe was mostly higher on Monday. Final Eurozone PMIs came in above the flash readings, with manufacturing hitting a 3-year high and most countries seeing improvement versus last month.
Last night the Nikkei was up 0.2%. A 10yr JGB auction was uneventful but yields have hit their highest level since July 2008. A review of the LDP’s big parliament losses in July is due and with it the future of the government. Chinese markets were lower overnight after Monday’s sharp gains. If you’re a fan of military hardware, China will be putting on its largest military parade ever tomorrow. Russia and China agreed to a new energy deal where Russia will increase gas supplies via existing and new pipelines.
Europe was down sharply as the DAX fell 2.3% and the STOXX 600 fell 1.5%. Political turmoil and significant long-term yield moves are creating storm clouds on the horizon. Politico reported that European Socialists, the second largest group in the European Parliament, are mobilizing to oppose the US-EU trade deal. In France, it looks more likely that the government will collapse and snap elections will occur should a confidence vote on September 8 go against the ruling government. As the political machine turns, long-term yields are hitting multi-decade highs: The French 30y is at 2009 levels, Germany is at its highest since 2011 and the UK is at levels not seen since 1998 as the country relives the short-lived Truss epoch in 2022.
European headline CPI ticked up from 2.0% to 2.1% this month, just above consensus. Core was unchanged at 2.3% and also slightly above consensus. The political process continues in France, which is trying to prevent the collapse of the ruling government and a September 8 confidence vote. There’s been recent focus on reforms to the Dutch pension system, likely coming at the end of this year, which could cause waves in European bond markets, and ultimately boost demand for US treasuries.
Global Indexes
Earnings:
- Pre-Market: ASO, SIG
- After-Market: ZS
- Pre-Market (Wed): CPB, CXM, DLTR, JILL, M, REVG
Economic Data:
- US:
- ISM Manufacturing: 48.7 vs. 49.0 cons., prior 48.0
- LMI Logistics Managers Index: 59.3 vs. prior 59.2
- S&P Manufacturing PMI final: 53.0 vs. 53.3 flash
- Construction Spending m.m: -0.1% vs. -0.1% cons., prior-0.4%
- Monday: European Manufacturing PMI (final): 50.7 vs. 50.5 flash
- Monday: China Official Manufacturing PMI: 49.4 vs. 49.5 cons., prior 49.3
- Non-manufacturing: 50.3 vs. 50.3 cons., prior 50.1
- Monday: China RatingDog (fka Caixin) Manufacturing PMI: 50.5 vs. 49.5 cons., prior 49.5
- South Korea CPI m.m: -0.1% vs. 0.2% cons,. prior 0.2%
- y.y: 1.7% vs. 2.0% cons., prior 2.1%
- Japan 10yr auction
- Europe CPI flash y.y: 2.1% vs. 2.0% cons., prior 2.0%
- Core: 2.3% vs. 2.2% cons., prior 2.3%
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