September’s Watchlist: Labor Market vs. Inflation 02/09/2025

HOT stories for today

US market wrap:

• Wall Street is coming off a solid month in equities. In August, the 30-member Dow Jones Industrial Average climbed more than 3%. The S&P 500 gained close to 2%, while the tech-focused Nasdaq finished the month up 1.6%. For the S&P 500, it marked the fourth consecutive month of advances. Investors are now anticipating Friday’s release of the August employment report and its potential impact on the Federal Reserve’s mid-month decision on interest rates.
• Markets ended lower on Friday, after the S&P 500 and Dow notched new highs the previous day. Heading into the extended holiday weekend, traders pared back positions, prompted by the steepest inflation reading since March. Meanwhile, a U.S. Appeals Court ruled late Friday that Trump’s emergency global tariffs were unlawful. Trump criticized the decision as “highly partisan” and pledged to challenge the ruling before the U.S. Supreme Court.

September’s Watchlist: Labor Market vs. Inflation

• Labor Day signals the end of summer and the start of a busier season for markets. Investors are bracing for a flood of jobs data this week that could shape the Fed’s next move on interest rates. The central bank has kept policy tight to fight inflation, but the labor market is cooling. That leaves traders hypersensitive to any sign of whether growth is slowing too much, or just enough to justify a rate cut. Economists say the “Goldilocks” outcome would be modest payroll growth and a slight rise in unemployment: proof the economy isn’t stalling but still giving the Fed cover to ease policy. The nightmare scenario? Falling jobs, participation, and unemployment, a mix that signals both weak demand and shrinking supply, which the Fed can’t easily fix.
• Meanwhile, political pressure is rising. Trump is attacking Powell and even threatening lawsuits against the Fed, creating more uncertainty ahead of the September meeting. Bottom line: Markets will be watching to see whether “bad news” turns into “good news” for stocks, or whether it simply means trouble.

Stocks on the move:

• Petco Health & Wellness (WOOF): The pet retailer and veterinary-care operator jumped 22% after boosting its full-year adjusted EBITDA outlook. Second-quarter EPS came in above analyst projections compiled by FactSet.
• Celsius (CELH): The energy drink maker’s stock climbed over 4% after PepsiCo (PEP) increased its ownership stake to 11%.
• Alibaba (BABA): Shares of the Chinese e-commerce heavyweight advanced more than 13% after unveiling a more sophisticated chip, aiming to offset limitations from Nvidia (NVDA)’s struggles in selling its semiconductors in China. Nvidia shares retreated over 3%.
• Caterpillar (CAT): The industrial equipment leader fell 4% after cautioning that tariffs could cost the company between $1.5 billion and $1.8 billion this year.
• Dell Technologies (DELL): Shares slid nearly 8% after the company issued third-quarter EPS guidance below Wall Street forecasts, despite surpassing expectations on both revenue and profit for the prior quarter.

Watchlist: BABA, NVDA, NIO, SIG, AAPL, DELL, CAT, RBLX, RDDT

Today’s action

• Asia-Pacific equities were mixed as investors digested the Shanghai Cooperation Organization summit in Tianjin, with lingering tariff uncertainty dampening sentiment. The backdrop comes after a U.S. federal appeals court ruled Friday that most of former President Donald Trump’s global tariffs were unlawful. India will be closely watched after Trump claimed the country had offered to cut tariffs on U.S. imports to zero.
• U.S. stock futures were little changed Monday night as traders weighed the latest trade headlines at the start of what is typically a weak month for equities. Dow Jones Industrial Average futures edged up 41 points, or 0.09%. S&P 500 futures gained 0.12%, while Nasdaq 100 futures advanced 0.13%. On the economic calendar, U.S. manufacturing data is due, and Trump is scheduled to speak at 2 p.m.

Bitcoin

• Bitcoin (BTC $110,243) kicked off September, historically its weakest month, by sliding to multi-week lows. The leading cryptocurrency dropped to $107,270 after the weekly open before bouncing back amid heightened volatility. Traders remain cautious with U.S. markets closed for Labor Day and fresh tariff uncertainty clouding sentiment.
• Meanwhile, gold is surging again, with outspoken gold advocate Peter Schiff calling the outlook for crypto “anything but bullish.” Institutional demand also appears to be cooling, with August posting roughly $750 million in Bitcoin ETF outflows. With September often proving punishing for Bitcoin bulls, the key question is whether 2025 will follow the same script.
  Watchlist: Bitcoin: 99 000-125 000, Ethereum: 4000-4980, Solana: 160-214
   

Forex

• USD/JPY: The yen fell for a third consecutive day on Tuesday, weighed down by uncertainty over the BoJ's rate hike and upbeat Asian equities. A firmer dollar lifted the pair to a one-week high near 147.85, though Fed-BoJ policy divergence may cap gains ahead of U.S. data.
• EUR/USD: The euro eased to 1.1695, snapping a three-day rise as geopolitical risks and concerns over French politics pressured sentiment. Upcoming Eurozone inflation and U.S. ISM data are in focus.
  Watchlist: EUR/USD: 1.0700-1.1700, USD/JPY: 140-151

Basic Materials

• WTI Crude (CL): Oil slipped to around $64.35 in early Asian trade Tuesday as U.S. tariffs on Indian goods fueled demand concerns. Hopes of a Fed rate cut and ongoing Russia-Ukraine tensions may cushion losses. Traders now await the API's weekly crude inventory report.
• Gold (XAU/USD): Bullion extended its rally for a sixth session, hitting a fresh record high. Expectations of a September Fed rate cut, tariff uncertainty, and geopolitical risks continue to fuel safe-haven demand, with a modest dollar rebound doing little to slow the advance.
  Watchlist: GOLD: 2600-3550, US Oil: 55.60-75.80

Key Economic Events Today:

EST time
10:00 am: USD ISM Manufacturing PMI, Prices
10:00 am: USD Construction Spending
02:00 pm: USD President Trump Speaks
 

Earnings

BMO (Before Market Open):

NIO                   NIO Inc.
SIG                   Signet Jewelers Limited
ASO                  Academy Sports and Outdoors 

AMC (After Market Close): ZS, HQY


The TEFS Analyst team wishes you a successful day!