Market wrap: what mattered in the last 24 hours

The final US trading day before the Labor Day long weekend centered on inflation, growth momentum, and month-end positioning. Three macro signposts drew most of the attention:

  • July Personal Consumption Expenditures (PCE) report: Investors focused on the core PCE deflator and “supercore” services categories to gauge the pace of disinflation and the trajectory of real consumer spending. The income, spending, and savings-rate mix within the release remained key for assessing the durability of consumption into early autumn.
  • Final August consumer sentiment: The University of Michigan’s update offered a late-month read on household inflation expectations and buying conditions, which feed into the outlook for discretionary demand and big-ticket items.
  • Chicago PMI: As a regional, late-month barometer, it provided a timely check on manufacturing activity and supply-chain dynamics ahead of next week’s national PMIs.

Beyond data, flows mattered. Month-end rebalancing and pre-holiday liquidity conditions shaped intraday moves across rates, equities, and FX. With many desks running lighter risk into the long weekend, price action tended to react more quickly to headlines and data beats or misses than on higher-liquidity days.

Fixed income

Treasury trading hinged on how the PCE report influenced the policy path into September. Front-end yields are most sensitive to the near-term Fed outlook, while the belly and long end continue to encode views on the pace of disinflation, growth resilience, and term premium dynamics. Into month-end, curve shape remained attentive to:

  • The balance between cooling inflation components and sticky services categories.
  • Any signs that real spending is slowing as excess savings ebb and student-loan dynamics normalize.
  • Upcoming supply cadence after the holiday as bills remain heavy and coupons approach the mid-month cycle.

Equities

Stock performance into the weekend reflected a tug-of-war between soft-landing hopes and the risk that growth slows more visibly into September. Leadership continued to hinge on earnings visibility and balance-sheet strength, while cyclicals were sensitive to the manufacturing and sentiment reads. Thin liquidity and options positioning into month-end amplified moves around the data prints.

US dollar and commodities

The dollar’s intra-day swings tracked relative rate expectations and the global risk tone. In commodities, energy traders monitored late-season demand trends and refinery runs as the summer driving season winds down, alongside any Gulf weather risks that could affect supply. Industrial metals were keyed to manufacturing signals ahead of next week’s PMIs.

Credit markets

Primary issuance slowed into the long weekend, a typical seasonal pattern. Secondary trading liquidity remained adequate but thinner. After Labor Day, investors expect a more active investment-grade calendar, with spreads taking their cues from the macro data barrage and rates volatility.

Seven-day outlook: catalysts and scenarios

The coming week packs a dense macro calendar that will set the tone for September:

  • Monday: US markets closed for Labor Day; liquidity globally may remain patchy.
  • Early week: ISM Manufacturing PMI (August) and S&P Global manufacturing final readings offer a timely read on factory activity, new orders, and prices paid. Construction spending adds color on the capex and housing-related backdrop.
  • JOLTS job openings: A key indicator of labor market tightness, quit rates, and hiring appetite. Markets watch for continued rebalancing between job openings and unemployed workers.
  • Midweek: ADP private payrolls and factory orders help triangulate demand and hiring ahead of Friday’s jobs report.
  • ISM Services PMI (August): Critical for the larger services side of the economy; the prices-paid and employment components often move rates and FX.
  • Weekly jobless claims: A high-frequency lens on labor-market momentum and potential turning points.
  • Friday: August Employment Situation (Nonfarm Payrolls): Headline jobs, unemployment rate, participation, and average hourly earnings will anchor the near-term policy debate and shape rate expectations into the September FOMC. Markets typically react not just to the headline but also to revisions and wage-inflation breadth.

Other watchpoints:

  • Treasury supply: Regular bill auctions continue; expect focus on the front-end as cash investors redeploy after month-end.
  • Corporate issuance: The post-holiday window is historically active; tone depends on rates stability and risk appetite.
  • Fiscal headlines: As the new fiscal year approaches on October 1, any developments on funding negotiations can influence rates term premia and risk sentiment.
  • Seasonals: September has a reputation for elevated equity volatility; liquidity and positioning can magnify data surprises.

How the data could steer markets

  • If manufacturing and services PMIs firm while prices-paid cool: Soft-landing narrative strengthens; equities and credit usually respond favorably, curve may bull-steepen if disinflation appears intact.
  • If PMIs soften materially and jobs data decelerate broadly: Growth concerns rise; long-end yields can decline on duration demand, cyclicals and small caps may underperform, defensive sectors gain.
  • If labor-market resilience is paired with re-acceleration in wages: Sticky-inflation concerns return; front-end yields can rise, USD typically finds support, and rate-sensitive equities may lag.
  • Mixed signals with stable inflation expectations: Range-bound trading likely, with micro (earnings guidance and issuance) driving relative performance.

Key thematic threads to monitor

  • Disinflation vs. stickiness: Whether services inflation continues to cool without a sharp demand retrenchment remains central.
  • Consumer resilience: Real income growth, savings buffers, and credit conditions will determine the late-year spending path.
  • Labor rebalancing: A gradual cooling—lower openings and stable unemployment—would be the “goldilocks” outcome.
  • Liquidity and positioning: Post-holiday flows and the approach of quarter-end can shift leadership and volatility regimes.

Actionable watchlist for the week

  • Core PCE details from the latest release: supercore services and shelter-adjacent components.
  • ISM prices-paid and employment subindices in both manufacturing and services.
  • JOLTS openings-to-unemployed ratio and quits rate as gauges of wage pressure risk.
  • Average hourly earnings breadth in Friday’s jobs report, alongside labor-force participation trends.
  • Primary market tone: corporate issuance backlog, new-issue concessions, and day-one performance.
  • Rates volatility: front-end vs. long-end reactions around data, and any shift in curve bias.

Where to find the primary releases

  • Personal income, spending, and PCE inflation: Bureau of Economic Analysis (bea.gov)
  • Consumer sentiment and inflation expectations: University of Michigan Surveys of Consumers (data.sca.isr.umich.edu)
  • PMIs: Institute for Supply Management (ismworld.org) and S&P Global (spglobal.com/marketintelligence)
  • Labor market: Bureau of Labor Statistics (bls.gov) for JOLTS and the Employment Situation; ADP Research Institute (adp.com) for ADP payrolls
  • Weekly jobless claims: US Department of Labor (dol.gov)
  • Treasury auctions and schedules: US Treasury (treasury.gov)

Release dates can shift; consult the official calendars above for the latest scheduling and source data.