Today’s Market Recap: Nonfarm Payrolls Far Exceed Expectations, Fed Rate Hike Expectations Heat Up, Micron Surges 6% Against the Trend, SanDisk Jumps Over 10%

Tracking Market Trends

TradingKey - On September 4, Eastern Time, the three major US stock indices closed lower across the board. US August non-farm payrolls data far exceeded market expectations, reinforcing investors' bets on a Federal Reserve rate hike in September. US Treasury yields and the US dollar rose in tandem, weighing on overall risk appetite in US equities. However, the semiconductor sector bucked the trend and gained, keeping the Nasdaq's decline relatively limited. US markets will be closed on Monday for Labor Day, and investors' attention in the next phase will shift to the US CPI and PPI inflation data to be released this week.

At the close, the Dow Jones Industrial Average fell 0.51% to 53,419.33; the S&P 500 Index lost 0.38% to 7,718.60; and the Nasdaq Composite Index declined 0.29% to 26,506.99.

In terms of sectors and individual stocks, market performance diverged significantly. Lululemon (LULU) plummeted 17.38% as the company lowered its full-year revenue and profit guidance, sparking market concerns over its business recovery process. Adobe (ADBE) fell 6.73% after announcing that long-serving CEO Shantanu Narayen will be succeeded by Anil Chakravarthy. Semiconductor stocks were among the market's few bright spots, with the overall sector rising 3.37%. AMD (AMD) rose 4.69%, Micron (MU) surged 6.1%, and SanDisk (SNDK) jumped over 10%.

In commodities, crude oil rally pauses. Brent crude (UKOIL) edged down to close at $95.84, while WTI crude (USOIL) fell 0.47% to close at $91.23. For the week, Brent gained 8.56% cumulatively, while WTI rose nearly 10%. Renewed military clashes between the US and Iran and persistent shipping disruptions in the Strait of Hormuz continued to support international oil prices.

In precious metals, gold (XAUUSD) fell noticeably. Spot gold dropped 0.94% to $4,431, having fallen over 2% intraday to near $4,365. Strong non-farm payrolls data drove the US dollar and Treasury yields higher while raising expectations for a Federal Reserve rate hike in September, serving as the main factor weighing on gold prices.

In cryptocurrencies, Bitcoin (BTCUSD) retreated after testing $80,000. Before the non-farm payrolls data was released, Bitcoin briefly climbed above $81,000, but quickly fell below $80,000 after the release, dipping to an intraday low near $78,600 before fluctuating back around $79,000. Rising rate-hike expectations driven by strong employment data pressured Bitcoin in tandem with other interest-rate-sensitive assets like gold.

Market News

US August nonfarm payrolls increased by 162,000, nearly triple market expectations. According to US Department of Labor data, nonfarm payrolls rose by 162,000 in August, far above the market expectation of 56,000, while the unemployment rate remained at 4.1%. Meanwhile, the combined job gains for June and July were revised up by 55,000. The strong jobs report demonstrates that the US labor market remains resilient, giving the Federal Reserve greater policy space amid still-elevated inflation. Following the data release, market expectations for a 25-basis-point rate hike in September rose significantly.

Expectations for a September Fed rate hike heat up again, with this week's CPI becoming the next key data point. Following the nonfarm payrolls release, interest rate futures at one point showed the probability of a 25-basis-point rate hike in September rising to about 65%, up from roughly 55% prior to the data. Earlier dovish remarks from Fed Governor Waller had cooled rate hike expectations, but strong employment data once again reinforced hawkish policy expectations. The US will release CPI and PPI data this week, and inflation performance could be one of the most critical variables shaping rate expectations ahead of the September 15-16 FOMC meeting.

Situation in the Strait of Hormuz deteriorates again over the weekend as US-Iran attacks expand scope. Latest data shows that over the past 10 days, an average of only about 10 commercial vessels per day transited the Strait of Hormuz, falling to the lowest level since May. US Central Command stated Saturday that US forces struck three Iranian tankers in response to prior attacks by the Islamic Revolutionary Guard Corps on US warships; Iran subsequently launched attacks on multiple tankers, including US-linked vessels. The escalation in maritime conflict leaves Middle East energy transport risks at elevated levels heading into the new week.

OPEC+ maintains October oil production policy. OPEC+ decided on Sunday to maintain its existing oil production policy for October. As the US-Iran conflict continues to impact Middle East energy transport, actual output from some members remains significantly below target levels, with the market currently paying closer attention to the pace of shipping recovery in the Strait of Hormuz and member countries' true supply capacity. The next OPEC+ core member meeting is scheduled for October 4.

US regulators investigate Tesla Cybercab autonomous robotaxi. The US National Highway Traffic Safety Administration (NHTSA) announced an investigation into Tesla (TSLA) Cybercab, focusing on whether the company properly completed safety self-certifications for the vehicles. Cybercab is a key component of Tesla's Robotaxi strategy, and the regulatory investigation means its autonomous driving commercialization process still faces policy and safety review risks.

Anthropic IPO timeline reportedly delayed to mid-October, with valuation potentially reaching up to $2 trillion. Sources said Anthropic is expected to push back its IPO roadshow timing to mid-October, with the prospectus potentially released in late September. The potential valuation for the IPO could reach up to $2 trillion, while the company is also finalizing a revolving credit facility of about $15 billion. As one of the world's most watched generative AI companies currently, Anthropic's listing process will serve as a major event testing capital market appetite for high AI valuations.

Two US newspapers sue OpenAI and Microsoft as AI copyright disputes continue to widen. The Seattle Times and Newsday have filed lawsuits against OpenAI and Microsoft (MSFT) in US federal court, accusing the two companies of copying news content without permission to train AI systems. As the US government previously pushed for copyright rules more favorable to AI training, legal conflicts between tech companies and content copyright owners are escalating further.

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