September 1st Market Overview

Happy Tuesday

Rough open to September, but the tape/volume made sense. U.S. hit Iranian targets, oil went with it, yields followed.

One day does not undo the year, of course. Stocks came into today with double digit gains and five straight winning months behind them.

Let’s dig in...

Today's Big Picture

1. Oil Takes Over The Tape

U.S. forces struck Revolutionary Guard targets in Iran after attacks on shipping and American troops. Brent cleared $94. The split was clean all day: energy funds hit record highs while airlines, cruise lines and casinos took the hit. Fuel is a cost for one group and revenue for the other.

2. This Is A Rates Story, Not A Panic

Gold and bitcoin both fell on a day the U.S. was bombing Iran. That is the tell. The 10-year got to its highest since January 2025, Japan's 10-year hit 3 for the first time since 1996, and British yields reached 2008 levels. When safe government debt pays this much, assets that pay you nothing lose the argument.

3. The Market Now Expects A Hike

Futures put the odds of a quarter point increase this month at better than two in three. A week ago it was under four in ten. Deutsche Bank told clients today a hike is now its base case. Friday's jobs report is the last thing standing between here and that decision.

Market Overview

Index Performance (Crude Today)

Stock spotlight

Apple $AAPL ( ▲ 2.76% )  
handed the CEO job to John Ternus today. Tim Cook ran the company for fifteen years.

Moderna $MRNA ( ▲ 9.38% )  
added to a very strong August. Its cancer vaccine with Merck posted good results last month in its first late stage trial.

Nike $NKE ( ▼ 1.22% )  
traded at $38.07, a new 52-week low and a price the stock has not seen in more than twenty years.

Medtronic $MDT ( ▲ 1.36% )  
raised its outlook after higher profit and sales in the fiscal first quarter.

Big name updates

Microsoft $MSFT ( ▼ 1.26% )  
picked up a $600 price target at Bank of America, up from $500. The bank likes what Azure growth and better AI margins do to returns from here.

Nvidia $NVDA ( ▼ 1.35% )  
is putting $3.5 billion into Taiwanese chipmaker MediaTek to work on AI computing and AI powered cars. MediaTek shares rallied in Taipei.

Novartis $NVS ( ▲ 6.12% )  
reported strong late stage results for its multiple sclerosis drug, which beat an established treatment. It also paused a separate cell therapy study after three patients died.

Home Depot $HD ( ▼ 2.63% )  
fell with the rest of housing. July construction spending came in at its weakest since October 2023, and mortgage rates are at a one year high.

Other notable company news

Blue Chips
MarketBeat names and lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

Marathon Petroleum $MPC ( ▲ 1.36% )  
traded at $381.15, a price last seen in June 2011.

United Airlines $UA ( ▼ 2.54% )  
L led travel lower as jet fuel costs climbed with crude.

Pfizer $PFE ( ▲ 0.23% )  
reached $29.09, its best level since October 2024.

UBS $UBS ( ▼ 2.75% )  
can likely use bonds instead of equity for half its new Swiss capital requirement after a lawmaker committee backed the split.

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Sector Watch

Bond market

The two year yield passed its high for the year at 4.375. The 30-year got back to 5.286, right where it sat the day before Bessent stepped in to knock it down last month. That intervention is now fully unwound.

Policy watch

Fed

Governor Michael Barr said the Fed should raise decisively if inflation is not cooling enough, and can wait if it is. That is the whole September argument.

Warsh's Jackson Hole speech is what moved the odds Friday, and the committee has followed. Boston's Susan Collins saw no moves at all this year back in June. She now sounds open to a hike.

The data did not settle it:

• Job openings edged up to 7.3 million in July, but hiring slowed to its weakest rate since February. Layoffs fell too. Low hire, low fire.

• Factory activity grew for an eighth month at 54.6. The prices component did not move.

Fiscal and trade

• Interest on the federal debt now eats close to one in five dollars of government revenue.

• Trump threatened to double tariffs on Canadian built vehicles starting January 1, 2027. Toyota and Honda have the most at risk. They build more than three quarters of all cars made in Canada

What to Watch

The AI Infrastructure's Backbone
10 Stocks Powering the AI Buildout

Tonight's Earnings

Dell, Palo Alto Networks and MongoDB report after the close. Dell's numbers show what companies are actually spending on AI servers, not what they say they plan to spend.

Wednesday's Private Payrolls

The ADP report gives the first read on August hiring. A soft number takes some heat off the rate debate.

Wednesday's Earnings

Broadcom, Hewlett Packard Enterprise and Snowflake report.

Thanks for reading - you are now the more informed 🙂

- John

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