The first week of September delivered mixed signals but with an optimistic undertone on Wall Street.

• The S&P 500 closed with a slight gain of 0.3%, consolidating its positive trend from recent weeks.

• The Nasdaq Composite was the big winner, rising 1.1%, driven by a rebound in major tech companies.

• The Dow Jones showed a more moderate performance, slipping slightly but remaining close to the record highs reached in August.

These moves reflect a market balancing enthusiasm over possible interest rate cuts with caution amid global economic uncertainty.

Drivers of the week

• Tech recovery: Alphabet stood out with a more than 9% surge after avoiding regulatory sanctions feared by the market. Apple also ended the week in positive territory, reinforcing the sector’s weight in the Nasdaq.

• Inclusions and revenues: Companies like AppLovin and Robinhood soared after confirmation of their inclusion in the S&P 500, sparking additional institutional buying.

• Mixed performance in consumption and energy: While consumer companies came under pressure from weaker confidence data, the energy sector showed strength thanks to expectations of looser monetary policy and stable oil prices.

• Safe havens and warning signs: Gold hit new record highs, reflecting the search for safe assets amid persistent inflation and Treasury bond volatility, which ended the week lower.

Monetary policy and macro data in focus

The Federal Reserve remains at the center of attention. Markets still expect a rate cut in September, though investors continue to debate whether it will be 25 or 50 basis points. The release of fresh inflation and employment data this week will be crucial in determining the size of the adjustment and projections for year-end. The Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) index are seen as key indicators that could shift the Fed’s tone. In addition, the start of the month brings business and consumer confidence reports that will provide more clarity on the strength of the economy.

Short-term outlook

• Key corporate events: The launch of the iPhone 17 and major tech conferences could give stocks in the sector new momentum.

• Employment and consumption in focus: The market awaits clear signs of an economic slowdown that would justify monetary easing.

• Contained but looming volatility: Although September began on a positive note, each new data point has the potential to either accelerate or dampen investor confidence.

Conclusion

Wall Street started September on the right foot, thanks largely to the dynamism of the tech sector and the resilience of key industries.

However, the market remains in delicate balance: expectations of rate cuts sustain optimism, but the macroeconomic data in the coming days will be decisive in confirming whether the bullish trend consolidates or caution takes over.

The opinions in the preceding commentary are as of the date of publication and are subject to change.  Information has been obtained from third party sources we consider reliable, but we do not guarantee the facts cited are accurate or complete.  This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We may execute transactions in securities that may not be consistent with the report’s conclusions.  Investors should consult their financial advisor on the strategy best for them.  Past performance is no guarantee of future results.

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Sources: Bloomberg, Reuters Energy, CNBC Markets, ISM Manufacturing Report