Aljif7's Blog
Wednesday 3 September, 2025
AREA: Finance
Market Wrap: Wall Street Ends August on Down Note as Tech Selloff Deepens Ahead of Labor Day Hiatus
Monday, September 2, 2024 | Morning Recap & Outlook
Wall Street closed the month of August in negative territory on Friday, with major indexes slipping amid a broad tech selloff led by disappointing results from Dell Technologies, which plummeted 8.9% after reporting elevated manufacturing costs for its AI-optimized servers. The sell-off spilled over into other high-flying AI names, with Nvidia down 3.3% and Broadcom off 3.6%, underscoring growing investor caution around near-term profitability in the artificial intelligence space.
The Dow Jones Industrial Average dipped 92.02 points, or 0.20%, to 45,544.88, while the S&P 500 fell 41.60 points (0.64%) to 6,460.26. The tech-heavy Nasdaq Composite bore the brunt of the decline, sliding 249.61 points (1.15%) to 21,455.55 — its weakest close in several weeks.
Despite the equity pullback, U.S. Treasury yields reflected persistent expectations for a September Fed rate cut. The policy-sensitive 2-year yield dipped 1 basis point to 3.62%, while longer-dated yields continued to steepen, with the 10-year benchmark ending at ~4.21%, down 2 bps on the day. The yield curve’s bearish flattening earlier in the month has now given way to a modest steepening, as markets price in slower growth and potential easing.
This comes despite resilient U.S. economic data: July PCE inflation, the Fed’s preferred gauge, rose 0.3% month-over-month, in line with expectations, while core PCE remains up 2.6% year-over-year. Meanwhile, consumer spending surged 0.7% in July, the strongest gain in four months, reinforcing the economy’s underlying strength even as inflation pressures linger.
The DXY dollar index edged lower to 97.82, as the greenback consolidated ahead of the long weekend. The euro gained ground, climbing to 1.1695, despite softer-than-expected inflation prints in Germany, France, and Italy.
The British pound underperformed, falling to 1.3507, as UK firms reportedly increased hedging against FX volatility. In contrast, commodity-linked currencies outperformed: the Australian dollar (0.6538) led gains among G-10 peers, followed by the New Zealand dollar (0.5898).
The Japanese yen strengthened to 147.35/USD, even as Tokyo’s inflation sharply eased due to government utility subsidies — though it remains well above the BoJ’s 2% target. The Swiss franc (0.8012) held steady, while Asian currencies were mixed: CNH (7.1270) was flat, SGD (1.2847) and THB (32.33) held firm, but Indonesia’s rupiah (16,485) weakened amid political concerns and signals of central bank intervention.
Cryptocurrencies came under renewed selling pressure, with Bitcoin (BTC) dropping to $108,310 and Ethereum (ETH) falling to $4,425, as liquidity thinned ahead of the holiday.
Meanwhile, gold rose to $3,445 per ounce, finding support from easing real yields and safe-haven demand amid uncertainty over the timing of the first Fed rate cut.
Gold price is at 3591 USD at the moment of this post.
U.S. financial markets are closed today (Monday, Sept 2) for Labor Day, but global markets remain active. Congress returns from recess today, setting the stage for a busy September on both fiscal and monetary fronts.
All eyes now turn to the week ahead, packed with critical data that could shape the Fed’s September meeting outlook:
A soft jobs print could boost hopes for a September rate cut, while a strong report may push expectations to October or beyond.
August ended with a risk-off tone as tech valuations corrected and macro uncertainty lingered. While inflation remains sticky, cooling yields and strong consumer spending paint a complex picture for the Fed. With markets closed today, traders are using the break to reassess positioning ahead of a pivotal week for U.S. data — where jobs and inflation will once again take center stage.
Stay tuned — September kicks off with a bang.
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