Markets Rally on Tech Boost as Fed Rate Cut Looms
Market Snapshot
- S&P 500: 6,448.26 (+0.51%)
- Dow Jones Industrial Average: 45,271 (-0.05%)
- Nasdaq 100 Futures: 23,512 (+0.27%)
- 10-Year US Treasury Yield: 4.213% (+0.0475%)
- WTI Crude Oil: $63.65 (-0.95%)
- Gold: $3,538 (-0.62%)
- Bitcoin: $110,864 (-0.76%)
Data as of Thursday, 4 September 2025. Dow Jones data as of market close 3 September 2025.
Economic Outlook: Fed Rate Cut Widely Expected
Investor optimism for an imminent interest rate cut has solidified, with markets pricing in a 96-98% probability of the Federal Reserve lowering rates at its September meeting. This sentiment is fuelled by mounting signs of a cooling US economy.
The latest Job Openings and Labor Turnover Survey (JOLTS) showed available listings in July fell to 7.18 million, one of the lowest levels since 2020. This was followed by softer-than-expected ADP private payroll data. While the national unemployment rate is forecast to rise to 4.3%, it remains historically low, suggesting companies are slowing hiring rather than initiating widespread lay-offs. Further reinforcing the cooling trend, the Fed’s own Beige Book survey noted “little or no change” in economic activity across most districts. Looking ahead, economists predict consumers will cut back on holiday spending for the first time in five years.
Despite the market consensus, Fed officials appear divided. Governor Christopher Waller has advocated for cuts to begin this month, whereas others, including Atlanta Fed President Raphael Bostic, have adopted a more cautious stance. The debate is further complicated by President Donald Trump’s nomination of Stephen Miran to the Fed’s governing board; Miran's confirmation hearing is scheduled for Thursday.
Corporate and Policy Developments
Tech Sector in Focus
US markets, particularly the tech-heavy Nasdaq, were boosted on Wednesday after a federal court ruling in Alphabet's antitrust case. The court decided against forcing Google to sell its Chrome browser but mandated data sharing and banned exclusivity deals to improve competition. The decision, which stopped short of a corporate break-up, sent Alphabet's shares up over 9% and provided a lift to the broader technology sector. In other news, President Trump is set to meet with prominent tech leaders including Meta's Mark Zuckerberg and Apple's Tim Cook.
White House Pursues Tariff Validation
President Trump has officially asked the Supreme Court for an expedited ruling on an appeal to overturn lower court decisions that found most of his tariffs illegal. Treasury Secretary Scott Bessent argued the ruling “gravely undermines the President’s ability to conduct real-world diplomacy”. The impact of existing tariffs is being felt across corporate America, with the term “tariffs” mentioned on 355 S&P 500 earnings calls this season. Companies such as Campbell's and J.M. Smucker have directly attributed lower earnings forecasts and consumer price increases to the levies.
US-China Tech Tensions
The US has informed Taiwan Semiconductor (TSM) that it will no longer be able to ship materials to its factory in China freely. The previous exemption has been removed, meaning the company will now have to seek approvals for shipments. TSM stated it expects to be able to continue production without interruption.
Key Company Updates
Retail Sector Sees Mixed Fortunes
Several retailers reported strong results. Macy's shares surged over 20% after strong earnings, with the department store giant crediting its strategy of focusing on 125 high-performing stores. Similarly, American Eagle saw its stock jump more than 25% after beating analysts' expectations. Meanwhile, Dollar Tree noted that its new, slightly more expensive $5 hammers are selling well after its cheaper $1.25 versions failed to attract buyers. Elsewhere, Lululemon is attempting to boost slowing growth with a push for international sales through partnerships with celebrities like British F1 driver Lewis Hamilton.
Other Market Movers
Shares in Salesforce fell more than 7% as weak guidance overshadowed its better-than-expected quarterly results. C3.AI tumbled more than 13% after reporting declining revenue and announcing a new CEO.
Energy Sector in Flux
ConocoPhillips announced plans to cut up to a quarter of its global workforce by the end of 2025, a move that mirrors recent job reductions at competitors Chevron and Marathon Oil. The lay-offs come as oil prices face downward pressure. The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) are set to meet on Sunday to discuss production policy and are reportedly considering unwinding output cuts more than a year ahead of schedule amid a supply surplus.
Public Offerings and Digital Assets
IPO Market Faces Confidence Test
The market for Initial Public Offerings (IPOs) is facing a significant test of investor appetite. Design software firm Figma, which went public in July, saw its shares tumble more than 15% after reporting disappointing quarterly results and a weak outlook. Despite this, a major wave of listings is expected next week. Fintech platform Klarna, cryptocurrency exchange Gemini, and financial services company Figure are aiming to raise a combined total of over $2.1 billion in what is anticipated to be the busiest period for IPOs since 2021.
Crypto Market Developments
American Bitcoin (ABTC), a mining and treasury company backed by President Trump’s sons, officially went public on the Nasdaq. Separately, the prediction market Polymarket, which allows users to bet on event outcomes using crypto, has received regulatory approval to operate in the US. In other news, Crypto.com is reportedly considering an IPO in 2025, and a new travel platform, Webus, has partnered with Air China to explore XRP-enabled services for airline loyalty programmes.
Global and Property Market Headlines
UK Budget Scheduled
In the UK, Chancellor Rachel Reeves has scheduled the autumn budget for 26 November. It will be delivered against a challenging backdrop of soaring government borrowing costs and tightening fiscal headroom.
Contrasting Signals in US Property Market
The US real estate market is showing conflicting signs. According to Redfin, nearly 15% of property deals fell through in July, the highest rate since 2017, as buyers grew nervous about jobs and high mortgage rates. In contrast, a potential sign of confidence has emerged in the commercial sector, where Norway's sovereign wealth fund—the world's largest—spent over $500 million on an office building in New York.
NOTE: This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).