September S&P 500 E-Mini futures (ESU25) are up +0.26%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.34% this morning, pointing to a higher open on Wall Street as investors boosted their expectations for how much the Federal Reserve will cut interest rates this year.
This week, investor focus is squarely on the release of key U.S. inflation data.
In Friday’s trading session, Wall Street’s major equity averages closed in the red. Lululemon Athletica (LULU) tumbled over -18% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the athleisure company cut its full-year guidance for the second time in a row. Also, Kenvue (KVUE) slumped more than -9% after the Wall Street Journal reported that the Department of Health and Human Services plans to release a report linking autism to pregnant women’s use of the company’s Tylenol painkiller. In addition, Copart (CPRT) fell over -2% after reporting weaker-than-expected FQ4 revenue. On the bullish side, Broadcom (AVGO) surged over +9% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the semiconductor and software company posted upbeat FQ3 results and issued above-consensus FQ4 revenue guidance. Bloomberg also reported that the chipmaker partnered with OpenAI to make AI accelerators.
The U.S. Labor Department’s report on Friday showed that nonfarm payrolls rose by 22K in August, weaker than expectations of 75K. Also, the U.S. unemployment rate ticked up to a 3-3/4-year high of 4.3% in August, in line with expectations. In addition, U.S. August average hourly earnings rose +0.3% m/m and +3.7% y/y, in line with expectations.
“Bad news for employment is good news for investors wanting lower rates. A September cut is a near certainty, and October is increasingly in play,” said David Russell at TradeStation.
Chicago Fed President Austan Goolsbee said on Friday that he remains undecided about what stance to take at the September meeting, pointing to upcoming inflation data. “I want to get more information. I’m still undecided as we’re going into this,” Goolsbee told Bloomberg Television. “We’ve got to look at the inflation side too.”
U.S. rate futures have priced in a 100% chance of a 25 basis point rate cut and a 9.9% chance of a 50 basis point rate cut at next week’s monetary policy meeting.
Meanwhile, U.S. President Donald Trump said late on Friday that White House economic adviser Kevin Hassett, Fed Governor Christopher Waller, and former Fed Governor Kevin Warsh are the finalists to replace Jerome Powell as the central bank’s chair. “You could say those are the top three,” Trump told reporters.
The U.S. consumer inflation report for August will be the main highlight this week. Slower price growth could reinforce expectations for a series of rate cuts after a likely move in September, while hotter-than-expected inflation may lead investors to price in a more cautious pace of easing. Market watchers will assess the extent to which hefty U.S. tariffs are passing through to consumers. HSBC economists said, “As reciprocal tariffs finally took effect in early August, markets will be keen to see if the August data reflect any uptick in prices from higher tariffs.” Other noteworthy data releases include the U.S. PPI, the Core PPI, Wholesale Inventories, Initial Jobless Claims, and the University of Michigan’s Consumer Sentiment Index (preliminary).
Market participants will also closely monitor the Bureau of Labor Statistics’ release of its preliminary benchmark revision to payrolls for the year through March. The figure is expected to show another downward revision to March payrolls, suggesting the labor market was weakening well before the recent spell of sluggish job growth. Fed Governor Christopher Waller recently projected that monthly job creation will be reduced by an average of about 60,000.
In addition, several notable companies like Oracle (ORCL), Adobe (ADBE), Synopsys (SNPS), Kroger (KR), and Chewy (CHWY) are scheduled to release their quarterly results this week.
U.S. central bankers are in a media blackout period before the September 16-17 policy meeting, so they are prohibited from making public comments this week.
Apple (AAPL) is expected to unveil the new iPhone 17 at its Tuesday event, with other models likely to be introduced, including a slimmer “Air” version and other “Pro” models. Also, several major tech companies are set to deliver presentations at the annual Goldman Sachs Communacopia + Technology Conference, with Nvidia (NVDA) scheduled for Monday, Meta (META) and Broadcom (AVGO) for Tuesday, and Microsoft (MSFT) for Wednesday.
Today, investors will focus on U.S. Consumer Credit data. Economists expect this figure to be $10.40 billion in July, compared to the previous figure of $7.37 billion.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.084%, up +0.05%.
The Euro Stoxx 50 Index is up +0.48% this morning, kicking off an eventful week on a positive note. Bank stocks led the gains on Monday, recovering part of last week’s losses. Energy stocks also gained ground as crude oil prices climbed on the prospect of additional sanctions on Russia. Data released on Monday showed that German industrial production rebounded in July, despite a continued decline in exports to the U.S., highlighting the sector’s resilience amid ongoing tariff pressures. Separately, a survey showed that investor sentiment in the Eurozone tumbled in September to its lowest level since April, as economic concerns returned forcefully across the bloc. Meanwhile, investors are bracing for a confidence vote in France later today that is expected to topple Prime Minister Francois Bayrou’s government. Investor focus this week is also on the European Central Bank’s rate-setting meeting. The central bank is widely expected to keep the deposit rate unchanged at 2.00% on Thursday. Investors will pay close attention to President Christine Lagarde’s remarks on inflation, including the ECB’s first quarterly forecasts since the European Union struck a trade deal with the U.S. that set tariffs on the bloc’s goods at 15%. In corporate news, Asml Holding (ASML.NA) rose nearly +1% after Reuters reported that the company is set to become the top shareholder of French artificial intelligence startup Mistral AI.
Germany’s Industrial Production and Eurozone’s Sentix Investor Confidence Index were released today.
The German July Industrial Production rose +1.3% m/m, stronger than expectations of +1.1% m/m.
The Eurozone September Sentix Investor Confidence Index came in at -9.2, weaker than expectations of -2.2.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.38%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.45%.
China’s Shanghai Composite Index closed higher today. Consumer stocks led the gains on Monday. Property stocks also advanced after China’s tier 1 city, Shenzhen, relaxed certain home purchase restrictions last Friday. At the same time, AI-related stocks slumped as investors continued to take profit. Investors largely shrugged off weaker-than-expected trade data from the country. Data released on Monday showed that China’s exports in August grew at their slowest pace since the beginning of the year as the temporary lift from the tariff truce with the U.S. faded. Chinese exports to the U.S. tumbled 33.1% in August, worsening from July’s 21.7% decline, according to The Wall Street Journal’s calculations based on official data. Import growth also slowed in August, indicating that domestic demand remains sluggish. HSBC economists said in a research note that China may face more export headwinds if global and U.S. demand weaken more sharply. Meanwhile, the benchmark index notched its biggest weekly drop in five months last week amid profit-taking following China’s largest-ever military parade and reports that Beijing may introduce measures to curb excessive stock speculation. However, Citi analysts said that China’s A-share market is likely still in the early phase of a bull rally. In corporate news, Baidu surged over +9% in Hong Kong after unveiling a plan to issue yuan-denominated unsecured notes on offshore markets. Investors are now awaiting China’s inflation data for August, due Wednesday, for more clues on the state of domestic demand.
The Chinese August Trade Balance stood at $102.33B, stronger than expectations of $99.40B.
The Chinese August Exports rose +4.4% y/y, weaker than expectations of +5.0% y/y.
The Chinese August Imports rose +1.3% y/y, weaker than expectations of +3.0% y/y.
Japan’s Nikkei 225 Stock Index closed sharply higher today after Prime Minister Shigeru Ishiba announced his intention to step down. Ishiba’s decision to resign came after election defeats in which his Liberal Democratic Party lost its majority in both houses of parliament. The Japanese yen weakened against the dollar on concerns that political instability could put a pause on the Bank of Japan’s interest rate hikes. The benchmark index was boosted by the positive tailwind from the weaker yen and prospects of increased government stimulus. Real estate, healthcare, and technology stocks outperformed on Monday. Meanwhile, the longer-term impact of the political turmoil on Japan’s stock and bond markets, as well as the broader economy, depends on who is chosen to succeed Ishiba. A leading contender in the LDP leadership race is Sanae Takaichi, a supporter of Shinzo Abe’s “Abenomics” policies, which involved massive stimulus and unprecedented monetary easing. On the economic front, revised data from the Cabinet Office on Monday showed that Japan’s economy grew much faster than initially estimated in the second quarter, driven by upward revisions in private consumption and inventories. Still, analysts warn that U.S. President Donald Trump’s tariffs could spark a sharp slowdown in exports this quarter and erode the economy’s current momentum. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +3.08% to 25.07.
The Japanese Q2 GDP Annualized was revised upward to +2.2% q/q from the initial estimate of +1.0% q/q.
The Japanese July Current Account n.s.a. stood at 2.684T yen, weaker than expectations of 3.366T yen.
The Japanese August Economy Watchers Current Index came in at 46.7, stronger than expectations of 45.6.
Pre-Market U.S. Stock Movers
Applovin (APP) and Robinhood Markets (HOOD) surged over +7% in pre-market trading after S&P Dow Jones Indices announced late Friday that the two stocks would be added to the S&P 500 index on September 22nd.
EchoStar Corp. (SATS) soared more than +24% in pre-market trading after SpaceX agreed to acquire wireless spectrum from the company for about $17 billion.
Chewy (CHWY) rose more than +2% in pre-market trading after Mizuho upgraded the stock to Outperform from Neutral with a price target of $50.
Scorpio Tankers (STNG) gained over +1% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $60.
DexCom (DXCM) fell nearly -1% in pre-market trading after Oppenheimer downgraded the stock to Perform from Outperform.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - September 8th
Caseys (CASY), Planet Labs PBC (PL), Mission Produce (AVO), Mama’s Creations (MAMA), Dynagas LNG (DLNG).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
