September 3, 2025
S&P 500 futures are up 0.4% after Tuesday’s pullback, with tech (especially semis), capital goods, financials, transports, and chemicals lagging yesterday while retail, biotech/pharma, managed care, and precious metals miners outperformed. Treasuries remain weaker, with yields up ~2 bp and the 30Y just under 5%. Dollar index -0.1%, gold +0.4%, Bitcoin -0.2%, and WTI crude -1.8% on OPEC+ headlines.
The bounce comes despite ongoing bond yield pressures, with markets still pricing a >90% chance of a September Fed cut. Sentiment supported by favorable Google Search trial remedies, thoughts the early-September pullback lacked catalysts, and positioning that favors buy-the-dip. Focus remains on the global yield backup, driven by deficits, supply, sticky inflation, and Fed independence worries. Reuters reported OPEC+ may consider a production boost Sunday to regain market share. Financial press noted efficiency gains are driving much of the recent earnings beats.
Today’s calendar includes JOLTS job openings, factory orders, Fed Governor Waller on CNBC, St. Louis Fed’s Musalem remarks, and the Fed Beige Book. Thursday brings ADP, productivity, unit labor costs, claims, trade balance, and ISM services. Friday’s August jobs report remains the key event (Street at +75K NFP, unemployment 4.3%, wages +0.3%).
Company News
- Alphabet (GOOGL): Gained after ruling that Chrome divestiture isn’t required; deal-making with distribution partners allowed, also positive for Apple.
- Dollar Tree (DLTR): Beat and raised, helped by tariff timing.
- Macy’s (M): Beat with first positive comp in 13 quarters.
- TSMC (TSM): Waiver allowing shipment of chipmaking equipment to China revoked by White House.
- Knight-Swift (KNX): Backed planned merger between Union Pacific (UNP) and Norfolk Southern (NSC).
- Comerica (CMA): Reportedly under activist pressure to explore a sale.
- HealthEquity (HQY): Beat and raised on strong Custodial performance, record GMs, and share gains.
- Zscaler (ZS): Fiscal Q4 beat with solid billings; mixed guidance seen as noisy due to Red Canary acquisition.
U.S. equities finished lower on Tuesday (Dow -0.55% | S&P 500 -0.69% | Nasdaq -0.82% | Russell 2000 -0.60%), extending their early-September pullback though closing near session highs. The tone was dominated by rising Treasury yields, with the 30-year briefly topping 5% before settling up 4–5 bp on the day. Dollar strength continued (DXY +0.6%) while gold surged 2.2% to a record above $3,500/oz. WTI crude gained 2.5% and Bitcoin futures rose 2.3%. Analysts pointed to fiscal pressures, political instability, and lingering Fed independence concerns as key overhangs, alongside seasonal headwinds as September historically ranks as the weakest month for equities. Tariff uncertainty remained in focus after a U.S. appellate court upheld the ruling that President Trump’s IEEPA tariffs are illegal, though levies remain in effect pending appeal to the Supreme Court. Markets expect the administration to fall back on other tariff levers such as Section 232 and Section 301 measures, reinforcing uncertainty for corporate pricing. On the economic front, August ISM manufacturing came in slightly below consensus at 48.7, though new orders moved back into expansion. July construction spending contracted unexpectedly, and the final S&P Global manufacturing PMI was revised down to 53.0. Looking ahead, JOLTS job openings, factory orders, and the Fed Beige Book are due Wednesday, with the August employment report the focal point Friday (Street at +75K NFP, unemployment 4.3%, wages +0.3% m/m).
Sector Performance
Sector leadership was defensive. Energy (+0.23%), consumer staples (+0.07%), and healthcare (+0.07%) eked out gains, supported by commodity strength, defensive positioning, and biotech outperformance. Utilities and communication services finished modestly lower, while materials slipped fractionally. On the downside, real estate (-1.74%) was the weakest group, pressured by rising long-term yields. Industrials (-1.06%), technology (-0.97%), consumer discretionary (-0.95%), and financials (-0.71%) also lagged, reflecting sensitivity to rates, tariffs, and cyclical demand uncertainty.
Company Highlights by Sector
Consumer Staples (XLP, +0.07%)
- PepsiCo (PEP +1.1%): Gained after Elliott Management disclosed a $4B stake, pressing for portfolio optimization and improved North America bottling efficiency.
- Kraft Heinz (KHC): Formally announced its plan to split into two entities—one focused on sauces, spreads, and seasonings, the other on grocery staples.
- Constellation Brands (STZ -6.6%): Fell sharply after cutting FY26 organic growth and EPS guidance, citing slowing high-end beer demand.
Consumer Discretionary (XLY, -0.95%)
- McDonald’s (MCD): Announced expansion of value offerings to target price-sensitive consumers.
- Starbucks (SBUX): CEO reported a record sales week following the fall product launch, led by the return of the pumpkin spice latte.
- Academy Sports & Outdoors (ASO -7.6%): Missed Q2 EPS and revenue estimates, though comps beat; raised full-year guidance but flagged tariff pressures.
- Signet Jewelers (SIG): Rose after posting a beat-and-raise quarter.
- Ferrari (RACE +3.1%): Upgraded to Buy at Deutsche Bank on expectations for stronger mid-term targets and capital return.
Industrials (XLI, -1.06%)
- Air Lease (AL +6.8%): Announced merger agreement with Sumitomo, SMBC Aviation Capital, Apollo, and Brookfield; deal values shares at $65, an ~8% premium.
- Fortive (FTV -1.0%): Downgraded at Morgan Stanley to Equal-Weight on slowing organic growth and policy uncertainty.
Technology (XLK, -0.97%)
- Lam Research (LRCX -3.1%): Downgraded to Underweight at Morgan Stanley, citing slowing China demand and NAND market headwinds.
- Fortinet (FTNT -2.3%): Downgraded to Underweight at Morgan Stanley, with analysts flagging weaker firewall refresh cycle and overoptimistic estimates.
- Corning (GLW +2.2%): Upgraded to Buy at UBS on expectations for AI-driven fiber growth.
Healthcare (XLV, +0.07%)
- Biogen (BIIB +5.6%): Gained FDA approval for Leqembi Iqlik, a subcutaneous injection for early Alzheimer’s disease maintenance dosing.
- Cytokinetics (CYTK +40.5%): Surged on positive Phase 3 MAPLE data showing aficamten significantly improved exercise capacity versus metoprolol.
- Ionis Pharma (IONS +34.8%): Jumped on strong Phase 3 data for olezarsen in severe hypertriglyceridemia.
- United Therapeutics (UTHR +32.8%): Advanced after pivotal TETON-2 study of Tyvaso met primary endpoint in idiopathic pulmonary fibrosis.
Financials (XLF, -0.71%)
- Freddie Mac (FMCC +2.9%): Rose on reports the U.S. government is considering selling ~5% of Fannie Mae and Freddie Mac.
Communication Services (XLC, -0.41%)
- Flutter Entertainment (FLUT -2.7%): Weighed down by reports it will partner with Crypto.com to launch sports prediction markets in 16 U.S. states.
Eco Data Releases | Wednesday September 3rd, 2025
S&P 500 Constituent Earnings Announcements | Wednesday September 3rd, 2025
Data sourced from FactSet Research Systems Inc.
