US Markets Retreat After Labor Day: Stocks Decline, Commodities Surge Amid Rate Cut Anticipation

Image Source : Krish Capital Pty Ltd

Performance of Broader Market Indices:  On September 2, 2025, the US market ended lower, with the Dow Jones Industrial Average down 0.2% at 45,544.88, the S&P 500 declining 0.6% to 6,460.26, and the Nasdaq Composite retreating 1.2% to 21,455.55. The weakness followed profit-taking in tech stocks and ongoing inflation concerns, while investors awaited signals on potential rate cuts from the Federal Reserve. Despite the day's drop, all three indices posted healthy gains for August, led by a 3.2% jump in the Dow, a 1.9% rise in the S&P 500, and a 1.6% increase in the Nasdaq.

Top Gainers and Losers:  The technology sector saw sharp declines, highlighted by Marvell Technology's 18.6% plunge after posting disappointing quarterly earnings. Other tech names were notably weak as well, while selective stocks outside tech—primarily in consumer staples and financials—managed modest gains. Within the Dow, 16 members finished lower and 14 higher, demonstrating a divided market as traders prepared for upcoming labor and inflation data that could influence Fed policy.

Futures of Broader Market Indices:  Broader market futures pointed to ongoing caution early in the session, with the Nasdaq 100, S&P 500, and Dow Jones futures down 0.70%, 0.61%, and 0.56%, respectively. Investors remained wary of heightened volatility ahead of major economic releases, including jobs and inflation reports.

Currency and Commodities Futures Update (Gold, Oil, Silver):  Gold futures surged to a historic high, closing above $3,500 an ounce, buoyed by expectations for a Fed rate cut and strong central bank demand. Silver also hit record levels, ending above $41 per ounce on robust industrial interest, while crude oil futures climbed over 2% amid fresh supply concerns stemming from Russia-Ukraine tensions and the upcoming OPEC+ meeting. The US Dollar Index strengthened slightly on the day, although broader currency weakness persists as traders anticipate monetary easing.

Macro Update:  US macroeconomic data revealed a strong rebound in the second quarter, with annualized growth at 3.3%, mainly driven by vigorous consumer spending and a drop in imports. Inflation remains a focal point, with core PCE steady at 2.9% year-over-year and the monthly PCE index advancing by 0.3%. The labor market will be in focus with jobs and productivity updates due soon, and swap markets now forecast a near 90% likelihood of a Fed rate cut at this month’s meeting. Persistent growth and inflation challenges continue to shape investor sentiment and strategic positioning.

Following a series of gains in recent sessions, stocks pulled back during Friday's trading. The S&P 500 fell by 41.60 points, or 0.64%, closing at 6,460.25. From a technical standpoint, the index found support at the 50-period simple moving average and remains above this level, suggesting overall bullish sentiment. However, given Friday's decline, there may be a bearish bias in trading today. Additionally, the 14-day RSI is near the mid-point, indicating potential for a downward move toward that level. Key support is identified around 6,366, while resistance is expected near 6,510.