Markets Slip to Start September as Yields Rise, Tech Lags

Daily Recap

Stocks began the month under pressure, dragged lower by rising Treasury yields, renewed tariff uncertainty, and a flood of corporate debt issuance. The selloff was led by megacap tech names as the 30-year yield edged toward 5%, reviving valuation concerns. While losses eased into the close, nearly 400 S&P 500 stocks ended in the red. Bond yields rose globally, the dollar gained, and gold surged to a record high as investors sought havens amid fiscal and policy unease.

Key Headlines & Market Movers

• Rising Yields and Debt Supply Pressure Stocks: A sharp climb in longer-dated Treasury yields weighed heavily on equities, particularly in rate-sensitive tech. The 30-year yield closed near 5%, its highest since 2007, amid concern over massive corporate debt issuance and rising global deficits. In the UK, long-dated gilt yields hit levels last seen in 1998.

Tech Leads Declines as Tariff Uncertainty Returns: Megacap tech stocks broadly fell, with Nvidia logging its longest losing streak since March. The sector faced dual headwinds: higher discount rates and geopolitical trade risks. A court ruling declared key Trump-era tariffs illegal, raising questions about near-term policy direction. Though the tariffs remain in place for now, uncertainty around the Supreme Court appeal weighed on market confidence. Chipmakers like Arm and Lam Research fell sharply, and Apple lost talent to Meta in a visible sign of competitive pressure.

• Gold Hits Record, Energy Gains on Oil Strength: Gold surged to a new all-time high, driven by haven flows amid rising volatility and global policy concerns. Spot prices climbed above $3,590/oz, lifting gold miners like Newmont and Barrick. Crude oil also rallied, with WTI rising 2.5% to $65.62, boosting the energy sector. The dollar index strengthened, driven by higher rates and global risk aversion.
• Jobs Data in Focus as Fed Rate Cut Bets Rise: Markets are looking ahead to Friday’s jobs report for clues on the Fed’s next move. Softer labor demand and rising unemployment would likely support a rate cut at the September meeting which futures markets are increasingly pricing in. ISM manufacturing data showed a continued slowdown, and job openings (JOLTS) are expected to fall further. Despite near-term volatility, some strategists continue to recommend using pullbacks to add equity exposure, citing resilient fundamentals and AI-driven growth trends.

S&P 500 Sector Performance

Looking Ahead

Investor focus now shifts to labor market data, particularly Friday’s payrolls report, which could tip the scales on the Fed’s September decision. With valuations stretched and seasonality typically weak, volatility may persist in the near term. However, several firms including UBS and Morgan Stanley see dips as opportunities, with long-term support from earnings, rate cuts, and secular growth drivers like AI.

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