Market Recap - Tuesday, September 2, 2025
Markets Stumble into September as Bond Yields Rise, Tariff Fears Resurface
Markets closed lower across the board today, with the S&P 500 falling 0.69%, the Nasdaq down 0.82%, and the Dow off 0.55%. This marks the second straight day of losses as investors digested rising bond yields, political uncertainty, and more tariff-related noise.
Big tech stocks were among the hardest hit, especially semiconductors, which continued their post-earnings slide. Other underperformers included banks, credit card companies, industrials, auto stocks, and retail favorites. Meanwhile, energy, healthcare, and consumer staples stocks held up better, with names like gold miners, biotech, and managed care stocks in the green.
What Drove the Market
Yields Surge: The yield on the 30-year Treasury briefly broke above 5% as investors grappled with rising fiscal concerns, political instability, and the possibility that the Fed may not be as independent as hoped. Yields moving higher tends to weigh on stock prices, especially for high-growth sectors like tech.
Tariff Turmoil: A court ruling found that many of Trump’s earlier tariffs were illegal — but they’re still in place for now. This adds to the uncertainty around trade policy going forward, with companies unsure how to price their goods or plan for supply chains. Markets are worried that rising trade tension could hurt profits and consumer demand.
Manufacturing Weakness: The ISM Manufacturing Index came in at 48.7, a bit below expectations. While new orders were encouraging, other components like production and employment remained weak. Businesses surveyed blamed tariffs and rising input costs for disruptions.
Seasonal Headwinds: September is historically the worst month for stocks — and that’s in focus. After strong gains through August (including a five-month streak for the Nasdaq), investors may be taking profits as they wait for more economic data later this week.
Notable Headlines
Gold hit a fresh record high, jumping 2.2% to close above $3,500/oz — a sign of investor nervousness and flight to safety.
Oil rose 2.5%, partly on expectations of tighter supply.
PepsiCo rose 1.1% after activist investor Elliott revealed a $4B stake and pushed for changes.
Biogen popped 5.6% after getting FDA approval for a new Alzheimer’s drug.
Cytokinetics, Ionis, and United Therapeutics each gained over 30% on strong clinical trial results.
Notable Movers
Gainers:
CYTK (+40%) – Positive late-stage trial data for its heart drug.
IONS (+35%) – Reported strong results for its triglyceride-lowering drug.
ULCC (+14.5%) – Upgrade from Deutsche Bank; seen benefiting from competitor’s bankruptcy.
PEP (+1.1%) – Gained on news Elliott is pushing for operational improvements.
Decliners:
ASO (-7.6%) – Beat comps, but flagged tariffs and missed on earnings.
STZ (-6.6%) – Cut its full-year outlook due to weaker demand for premium beer.
LRCX (-3.1%) – Downgraded on concerns around slowing China and NAND chip demand.
Here's Our Take
Markets started September with a cautious tone. Higher bond yields, tariff drama, and seasonal weakness combined to put pressure on stocks today, particularly in growth sectors. But while the pullback may feel uncomfortable, some strategists believe it could be short-lived.
Investor positioning is still relatively cautious, and expectations of a Fed rate cut later this month remain intact — which could ultimately support a rebound. Plus, key data later this week (including Friday’s jobs report) may offer more clarity on the economic outlook.
For now, we see this as a healthy breather after an impressive summer rally. But volatility is likely to stay elevated in September — so staying diversified and not chasing short-term trends remains critical.
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