U.S. equities begin September under pressure as another rise in Treasury yields and renewed gains in oil revive inflation and Fed-tightening concerns. At about 4:45 a.m. ET, Dow futures were down 0.48%, S&P 500 futures were down 0.48% and Nasdaq 100 futures were down 0.83%. Monday, the Dow fell 0.70%, the S&P 500 declined 0.33% and the Nasdaq slipped 0.12%, although all three indexes still finished August higher.
Treasury yields remain the dominant valuation pressure. Monday’s 2-year yield slipped 1 basis point to 4.34%, while the 10-year rose 3 basis points to 4.75% and the 30-year climbed 4 basis points to 5.25%. The global bond selloff has intensified this morning, pushing the 10-year Treasury yield as high as roughly 4.79%, its highest since January 2025, while markets now price approximately a 65%-66% probability of a September Fed rate increase following Chair Kevin Warsh’s Jackson Hole remarks.
The DXY closed Monday at 99.42 and has strengthened toward 99.6 this morning. The euro is near $1.159, sterling around $1.353 and the dollar is again trading near ¥160, increasing speculation around possible Japanese intervention. October WTI gained 3.01% Monday to $85.91 and is another roughly 1.5%-2% higher near $87.25 this morning as renewed U.S.-Iran hostilities increase risks around Strait of Hormuz shipping. December gold fell 0.63% Monday to $4,501.30 and is under additional pressure this morning as higher real and nominal yields reduce demand for non-yielding assets.
Today’s calendar brings the first major tests of the week. The final August S&P Global Manufacturing PMI is due at 9:45 a.m. ET, followed at 10:00 a.m. by the August ISM Manufacturing Index and July JOLTS report. JOLTS follows June’s 7.4 million job openings and will provide another read on labor demand ahead of Wednesday’s ADP report and Friday’s August employment report. Markets are increasingly sensitive to any combination of resilient employment and persistent inflation that could reinforce expectations for a September rate increase.
Sector Highlights
Sector performance was broadly negative Monday despite strength in Energy and Technology. Energy led with a 2.10% gain, followed by Technology +0.30%, while Consumer Staples declined 0.33%. Communication Services fell 1.63%, Utilities declined 1.18%, Industrials lost 1.16%, Materials fell 0.84%, Real Estate declined 0.77%, Consumer Discretionary fell 0.72%, Financials lost 0.71% and Health Care declined 0.42%. Breadth was negative at 1.85:1 on the NYSE and 1.55:1 on the Nasdaq.
Information Technology
- Nvidia (NVDA) remains in focus after gaining Monday despite the broader market decline. Nvidia announced a $3.5 billion investment in convertible bonds issued by Taiwan’s MediaTek, deepening a partnership spanning AI data centers, PCs and automotive computing. MediaTek will adopt Nvidia’s NVLink Fusion technology to enable customers to develop custom AI accelerators that connect directly into Nvidia-based systems. The deal follows Nvidia’s recent large financial commitments across the AI infrastructure ecosystem and is likely to keep investor attention on both AI demand and increasingly interconnected financing arrangements.
- Dell Technologies (DELL) reports fiscal second-quarter results after today’s close in another major test of AI-infrastructure demand. Consensus expectations are approximately $4.91-$4.92 of adjusted EPS on $44.9 billion of revenue, compared with $2.32 and $29.8 billion a year ago. Wall Street expects server and networking revenue to approach $25 billion, nearly double the prior-year level, with investors focused on AI-server orders, margins, memory costs and whether Dell raises its full-year infrastructure outlook.
- Palo Alto Networks (PANW) also reports after the close. Consensus calls for roughly $0.98 of adjusted EPS and $3.35 billion of revenue, with investors focused on next-generation security annual recurring revenue, platform consolidation and demand for Cortex, Prisma and AI-enabled cybersecurity products. Strong results from CrowdStrike last week have raised expectations for continued enterprise security spending.
- Hut 8 (HUT +1.8% premarket) is higher following reports that it will develop a roughly 350-megawatt Texas data center connected to a $35 billion cloud-computing agreement between Anthropic and Nvidia-backed Lambda. The agreement reinforces growing demand for power and data-center capacity as frontier AI companies secure increasingly large blocks of compute infrastructure.
- Broadcom (AVGO) reports Wednesday in the next major AI semiconductor catalyst. Investors will focus on custom AI accelerators and networking demand after Nvidia’s strong outlook, particularly Broadcom’s exposure to hyperscaler-developed chips and whether AI revenue growth remains strong enough to offset higher discount rates.
Financials
- Robinhood (HOOD +2.5% premarket) is outperforming after Morgan Stanley upgraded the shares to Overweight from Equal Weight and lifted its price target to $150 from $124. The firm cited Robinhood’s expanding product suite and improving economics per customer as clients hold more assets and use a broader range of trading and financial products.
- Crypto-linked financial shares remain sensitive to the combination of rising Treasury yields and resilient digital-asset prices. Bitcoin is holding near $78,000, leaving Robinhood, Coinbase and other crypto-exposed platforms caught between continued trading activity and a more restrictive interest-rate backdrop.
Energy
- Exxon Mobil (XOM) and Devon Energy (DVN) are both up more than 1% premarket as crude extends Monday’s rally. Devon gained roughly 2.5% Monday, while Chevron, ConocoPhillips and Occidental Petroleum also advanced as investors increased the geopolitical-risk premium embedded in crude prices.
- The energy move follows renewed U.S.-Iran military exchanges and threats of further strikes, keeping the Strait of Hormuz at the center of the global supply outlook. Brent crude has moved above $92 per barrel, increasing near-term cash-flow expectations for U.S. producers while simultaneously adding to inflation concerns for the broader equity market.
- Halliburton (HAL) and Valero Energy (VLO) each gained approximately 1.9% Monday, with oilfield services benefiting from higher crude prices and refiners remaining supported by tight global fuel supplies.
Utilities
- PG&E (PCG -20.1% Monday) suffered its largest one-day decline in more than six years after California lawmakers failed to adopt the broad wildfire-liability protections investors had expected. The compromise legislation focuses primarily on accelerating payments to fire victims and restricting the transfer of insurance claims rather than substantially reducing utilities’ financial exposure to future wildfire losses.
- Edison International (EIX -23.1%) was hit even harder, while Sempra (SRE -3.1%) also declined. Several analysts downgraded California utilities after the legislative outcome, arguing that the existing wildfire-liability structure continues to create financing uncertainty and could constrain capital spending or raise the cost of capital.
- PG&E has scheduled a post-legislative-session update for September 2, making its capital-allocation response the next major catalyst for the group.
Consumer Discretionary
- Amazon (AMZN -2.9% Monday) fell after the Federal Trade Commission and 22 states filed suit over Amazon’s advertising-auction practices. The government alleges Amazon secretly increased minimum ad prices and inflated advertiser costs by $20 billion or more. Amazon disputes the allegations and argues that its advertising systems improve relevance and have not produced the price inflation alleged by regulators.
- GameStop (GME +2.9% Monday) rose after amending a previously announced $1.4 billion convertible-note exchange so that approximately $358 million will be settled in cash rather than shares, reducing expected dilution. GameStop simultaneously said quarterly sales are likely to fall to $780-$800 million from $972 million a year earlier as store closures and the disposal of its French business reduce revenue.
- Shein’s Hong Kong debut provides another read on global apparel demand and investor appetite for discretionary retail. The fast-fashion company traded below its IPO price during its first session after entering the public market at a valuation dramatically below its prior private-market peak.
Health Care
- Medtronic (MDT) reports fiscal first-quarter results this morning. Consensus expectations call for approximately $1.39 of adjusted EPS on $9.55 billion of revenue. Investors will focus on cardiovascular growth, diabetes products, surgical robotics and whether recent new-product launches can sustain organic revenue acceleration.
Data sourced from Factset/Reuters
