Global Markets – September 2, 2025: U.S. Stocks Slip at the Start of September, Europe Faces Inflation Pressures, Oil Rises

1. Highlights

• Wall Street opened September in the red, with the S&P 500 correcting but closing above its intraday lows.
• U.S. ISM Manufacturing improved; new orders rebounded above 50.
• September seasonality is typically weak, but markets may have already priced in much of the downside risk.
• In Europe, Eurozone inflation came in above expectations, while political risks in France and fiscal concerns in the UK weighed on sentiment.
• Oil prices rose more than 2% on renewed concerns over Russian supply disruptions.
• Notable stock moves: Constellation Brands, Kraft Heinz, Pepsi, LVMH, Kering.

2. U.S. Markets

U.S. equities fell on the first trading day of September, led by weakness in big tech, though the S&P 500 managed to recover from intraday lows.

• Indices & Risk Metrics
  • S&P 500: lower
  • DXY: +0.57% to 98.33
  • VIX: +6.5% to 17.17
• Bonds
  • U.S. Treasury yields rose 3–4bps across the curve.

• Fed Expectations
  • ~23bps rate cut expected at the September 17 meeting.
  • ~56bps cumulative cuts priced in for the remaining three meetings of 2025.
• Economic Data
  • ISM Manufacturing (Aug): 48.7 (vs. 49 cons, 48.0 prior).
  • New Orders: 51.4 (+4.3pts).
  • Prices Index: 63.7 (–1.1pts).
• Seasonality & Market Sentiment
  • Barclays: Over the past 20 years, median September drawdown for the S&P 500 is –2.95%.
  • Current pullback already accounts for ~50–75% of that median decline.
• Stock Highlights
  • Constellation Brands (–6.6%): Cut FY26 EPS guidance to $11.30–11.60 (from $12.60–12.90).
  • Amcor (–1.9%): Fell on negative sentiment following Kraft Heinz (–7%) spin-off news.
  • Kraft Heinz (–7%): Announced split into two entities — North American Grocery ($10.4B sales) and Global Taste Elevation ($15.4B sales).
  • Pepsi (+1.1%): Elliott disclosed ~$4B stake, pushing for restructuring of North American beverage operations.

EUROPEAN Markets

European equities closed broadly lower, pressured by inflation data and political uncertainty.

• Indices
  • FTSE: –0.9%
  • Stoxx 600: –1.5%
• UK
  • Telegraph: PM Starmer brought in economic experts to oversee the Chancellor ahead of the budget.
  • GBP: –1.3%
  • 30-year Gilt yields: highest in 27 years.
• Eurozone
  • CPI (Sep): +2.1% YoY (vs. +2.0% prior).
  • ECB expected to hold rates, consistent with comments from Schnabel.
• France
  • Risk of snap elections if government fails in the Sept 8 confidence vote.
• Sectors
  • Worst performers: Real Estate (–3.6%), Travel & Leisure (–2.9%), Tech (–2.8%), Retail (–2.6%).
  • Relative outperformers: Personal Goods (–0.3%), Food & Beverage (–0.5%), Autos (–0.6%).
• Stock Highlights
  • LVMH (+1.9%) and Kering (+3.8%): Upgraded by HSBC on China consumer rebound hopes.
  • Nestlé (–0.7%): Trimmed early 4% losses after replacing CEO for the second time in just over a year.

3. Commodity Markets

Oil rallied strongly on renewed supply concerns from Russia, amid continued global trade tensions.

• Crude Oil: +2.5% (Brent/WTI).
  • Ukraine strikes on two Russian refineries pushed output to lowest since May 2022.
  • U.S. pressured India to reduce Russian oil imports; India rejected, offering tariff cuts on industrial goods instead.
  • Gazprom signed binding deal for “Power of Siberia 2” pipeline to China via Mongolia (50 bcm annual capacity).
• Metals & Precious Metals
  • Gold: +0.7%, broke through $3,500/oz to hit record $3,540/oz amid Fed cut expectations and tariff uncertainties.
  • Silver: +0.5%, reached $40.93/oz — first time since 2011, up >35% YTD.
  • Base Metals: Copper (+1%), Zinc (+1.2%), Aluminum (+0.3%), Nickel (–1.5%), Lead (–0.5%).
  • Iron Ore: +0.8%, supported by high hot metal output despite China’s Steel Industry Stabilization Plan targeting production cuts.
     

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