Closing Recap

U.S. stocks finished broadly lower as markets returned from the holiday, pressured by a sharp sell-off in global government bonds and ongoing political uncertainty in Japan and the UK; gold surged to new all-time highs and oil gained on geopolitical risk, while the dollar firmed against a tumbling British Pound and against the Euro and Yen. 

Key Takeaways 

• Stocks Fall on Global Debt Jitters: Equities started the month with broad losses (S&P -0.69%, Nasdaq -0.82%) as a sharp sell-off in UK government bonds sparked wider fears about sovereign debt levels. 
• Gold Surges to New Record Highs: Gold prices roared to new all-time highs, with futures touching $3,600/oz, driven by intense safe-haven inflows and high expectations for a September Fed rate cut. 
• Weak Manufacturing Data: Recently released ISM Manufacturing data for August remained in contraction territory, though the new orders component improved, painting a mixed picture for the factory sector. 
• Forex Volatility: The British Pound plunged on the back of surging UK bond yields, while the Japanese Yen weakened on political uncertainty. The U.S. dollar firmed overall but remained pressured by Fed rate cut expectations. 
• Oil Gains on Supply & Geopolitical Risk: Crude oil prices were higher, supported by dip-buying and ongoing geopolitical tensions. 
• Focus on Jobs Report: The market is now squarely focused on Friday’s pivotal August Nonfarm Payrolls report, which could determine the Fed’s path for a September rate cut. 

Market Overview 

U.S. equity markets began the notoriously volatile month of September with a risk-off session, as traders returning from the long Labor Day weekend were greeted by turmoil in global government bond markets. The primary catalyst for the negative sentiment was a sharp sell-off in UK long-dated government bonds (gilts), which sent yields surging to their highest levels since 1998. This sparked renewed investor worries about the health of government finances globally and the rising debt levels across major economies. The turmoil in the UK sent the British Pound tumbling and had a clear spillover effect on broader risk sentiment, pushing U.S. stocks lower from the open. 

Index	Up/Down	% Change	Last
DJ Industrials	-92.02	-0.002	45544.88
S&P 500	-41.6	-0.0064	6460.26
Nasdaq	-249.61	-0.0115	21455.55
Russell 2000	-14.11	-0.006	2352

Adding to the cautious mood was ongoing political uncertainty in Japan, where Prime Minister Shigeru Ishiba is facing pressure to resign after a recent election loss, which has weighed on the Japanese Yen. In this environment of uncertainty, safe-haven assets were in high demand. Gold prices roared to new all-time highs, with futures briefly trading above $3,600 per ounce, driven by a combination of geopolitical risk, concerns over Fed independence, and strong expectations for a Federal Reserve rate cut in two weeks. 

U.S. economic data released today was mixed. The final S&P Global Manufacturing PMI for August held steady, but the more closely watched ISM Manufacturing PMI remained in contraction for another month. While the ISM’s new orders component showed a welcome rebound, the employment index remained weak, keeping the focus on Friday’s crucial jobs report.

Economic Data

Economic data released today showed the U.S. manufacturing sector remains in contraction, though some components improved, while construction spending also softened. 

• ISM Manufacturing PMI (Aug): 48.7 (Consensus: 49.0, Prior: 48.0). New Orders 51.4 (vs. 47.1 prior). Prices Paid 63.7 (vs. 64.8 prior). Employment 43.8 (vs. 43.4 prior). 
• S&P Global US Mfg PMI (Aug Final): 53.0 (vs. 53.3 flash). 
• Construction Spending (July): -0.1% m/m (matching consensus, vs. -0.4% prior). 

Key Today and this week: 

• U.S. Job Openings (JOLTS) data: Consensus: 7.4M, Prior: 7.437M (today). 
• Speeches from Fed’s Musalem, Goolsbee, and Williams (today.
•  U.S. Non-Farm Payrolls (NFP) report for August (Friday).

Commodities, Currencies, and Treasuries 

Gold prices surged to new all-time highs, with December futures gaining $76.10 (+2.16%) to settle at $3,592.20 per ounce. The rally reflected a powerful wave of safe-haven inflows as traders priced in a 92% chance of a September Fed rate cut and reacted to global debt concerns. Crude oil prices were also higher, with WTI gaining $1.58 (+2.47%) to $65.59/bbl, supported by dip-buying after recent weakness and ongoing geopolitical tensions. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.58	USD/bbl	65.59
Brent	0.99	USD/bbl	69.14
Gold	76.1	USD/oz	3592.2
EUR/USD	-0.0072	USD	1.1637
USD/JPY	1.2	JPY	148.38
10-Year Note	0.049	%	0.04276

The U.S. dollar firmed as a safe haven against currencies like the tumbling British Pound (-1.0%) but weakened against the Euro and was mixed against the Yen. The sell-off in UK gilts drove global bond yields higher, with the U.S. 10-year yield climbing about 5 basis points to 4.276%. Bitcoin stabilized above $111,000 after a recent drop.

Looking Ahead 

The market will be closely watching for any signs of stabilization in the UK gilt market, as further turmoil could continue to weigh on global risk sentiment. The primary focus for the week remains Friday’s August U.S. jobs report. In the interim, commentary from a slate of Fed speakers, including voting members, will be closely watched for any hints about their policy leanings, especially in light of the renewed turmoil in global bond markets and the persistent calls for easing from the White House. U.S. Job Openings (JOLTS) data is due today.