Article by: Tide Research
Last Friday, the three major U.S. stock indices ended a two-week rally with broad declines: the S&P 500 fell 0.38% to 7,718.60, the Nasdaq dropped 0.29% to 26,506.99, and the Dow Jones slipped 0.51% to 53,414.25. For the week, the Dow declined 0.27%, the S&P 500 fell 0.08%, while the Nasdaq rose 0.54%. The primary drag on the market was the stronger-than-expected August non-farm payrolls data, reigniting market expectations of a September interest rate hike and pushing short-term U.S. Treasury yields to their highest level in over a year and a half. However, the market did not decline uniformly—capital flowed heavily into the semiconductor sector, with the Philadelphia Semiconductor Index surging 3.37% to 11,735.26, while memory and optical communications stocks also strengthened significantly. Over the weekend, geopolitical tensions escalated further as Iran announced it would declare a “no-go zone” in the Strait of Hormuz in the coming days, intensifying military standoff between the U.S. and Iran; WTI crude oil opened higher in Asian trading on Monday. This week’s key focus: August CPI data and the evolving U.S.-Iran conflict.
Non-farm payroll data beats expectations, reigniting rate hike concerns, while the chip sector attracts capital despite the downturn.
The U.S. August non-farm payroll data significantly exceeded expectations, prompting markets to reprice bets on a Fed rate hike in September. Short-term U.S. Treasury yields rose to their highest level in over a year and a half; the 2-year Treasury yield increased 3.4 basis points to 4.3703%, reaching a intraday high of 4.416%, the highest since January 2025. The 10-year Treasury yield remained around 4.78%. The U.S. Dollar Index rose 0.27% to 99.177, reversing its prior downward trend.
Rising expectations for rate hikes directly pressured high-valuation assets. The three major indices ended their two-day winning streak with broad declines: the S&P 500 fell 0.38% to 7,718.60, the Nasdaq dropped 0.29% to 26,506.99, and the Dow declined 0.51% to 53,414.25. Market pricing for a September rate hike rebounded above 50% following the release of the nonfarm payrolls data.
However, capital has not fully withdrawn from equity markets; instead, it has selectively concentrated in sectors supported by industrial logic—semiconductor stocks. The Philadelphia Semiconductor Index rose sharply by 3.37% to 11,735.26, hitting its highest closing level since August 27. Memory and optical communication sectors led the gains, with NVIDIA rising over 2%.
The industrial logic behind this performance is clear: ongoing validation of order data for AI infrastructure, Dell’s previously record-breaking AI server order guidance still gaining momentum, and Broadcom’s raised AI revenue forecast to $58 billion along with a long-term roadmap projecting $230 billion by 2028—all continue to strengthen market confidence in the AI hardware supply chain. While rising interest rate expectations are pressuring overall valuation levels, segments with strong fundamental fundamentals still attract capital inflows.
The Seven Giants as a whole faced pressure. The Wind United States Tech Seven Giants Index fell approximately 1.13%, with Tesla leading the decline, dropping 5.92%. Tesla’s decline is linked to the macroeconomic interest rate environment, as high-valuation, high-growth stocks are most sensitive to interest rate changes. NVIDIA strengthened against the trend, closing up over 2%. Lululemon continued to face pressure following a more than 17% drop in after-hours trading.
Iran announces establishment of a "no-go zone" in the Strait of Hormuz; oil prices open higher
Geopolitics once again became a key market variable over the weekend. On September 6 local time, Rezaei, Secretary of Iran’s Supreme National Security Council, stated that Iran would declare a “no-go zone” in the Strait of Hormuz in the coming days. On the same day, the Islamic Revolutionary Guard Corps Navy issued a statement claiming it had sunk a U.S. maritime unmanned vessel attempting to enter the Strait of Hormuz.
Prior to this, U.S. forces had been applying sustained pressure in the Strait of Hormuz. The U.S. Central Command reported that, as of September 6, U.S. forces had directed 92 commercial vessels to alter course, disabled three commercial vessels, and boarded two ships for inspection. The Iranian Revolutionary Guard Corps, meanwhile, claimed to have launched ballistic missiles targeting a U.S. aircraft carrier and a destroyer.
The standoff between the U.S. and Iran in the Strait of Hormuz is escalating from friction into a full-scale confrontation of blockades and counter-blockades. Iran’s announcement of a "no-go zone" means that any foreign vessels entering the area without permission will face military risks, directly threatening global crude oil transportation routes.
As a result, WTI crude oil opened higher at the start of Asian trading on Monday. On Friday, WTI crude closed up 0.20% at $91.48 per barrel, while Brent crude closed up 0.80% at $96.28 per barrel, with both rising approximately 9% for the week. The U.S. retail average price for diesel reached a record high of $5.85 per gallon. If passage through the Strait of Hormuz faces further disruption, oil prices could continue to rise.
The escalation of geopolitical risks, combined with renewed expectations of rate hikes following the non-farm payrolls data, created dual pressures on the market this week.
Global central banks are accelerating the localization of gold, and gold has staged a V-shaped rebound, recovering most of its losses.
According to the latest survey by the World Gold Council, 19% of central banks increased their domestic gold reserves or diversified their holdings over the past 12 months, up from 7% a year ago. The number of central banks storing gold in vaults in New York and London continues to decline, as rising geopolitical risks are reshaping the global allocation of gold reserves.
Spot gold fell 0.97% on Friday to $4,429.29 per ounce, dropping more than 2% intraday to $4,365.25 before recovering most of its losses, exhibiting a V-shaped rebound.
This Week's Focus
U.S. August CPI data (Thursday). Following the stronger-than-expected nonfarm payrolls data, market expectations for a September rate hike have reignited. The CPI will be a key indicator to validate Waller’s assertion that inflation is continuing its downward trend. If CPI exceeds expectations, the probability of a September rate hike will rise further; if CPI comes in weaker, the dovish expectations triggered by Waller’s remarks may regain dominance.
The evolution of the U.S.-Iran conflict in the Strait of Hormuz. Following Iran’s announcement of a “no-go zone,” how the U.S. responds and whether navigation through the strait faces further disruption will directly impact oil price movements and global risk appetite. Brent crude has already risen approximately 9% last week; if the situation escalates further, oil prices could rise even more, pushing up inflation expectations.
Changes to Anthropic’s IPO timeline. According to media reports, Anthropic is now expected to begin its IPO roadshow as early as mid-October and complete its listing just days before the U.S. midterm elections in November. Previously, the market anticipated that the prospectus would be filed as early as next week, but this has now been delayed until late September. As one of the most closely watched IPOs in the AI sector, shifts in its listing timeline could impact market sentiment across the AI industry.
This week, three market directions have become clear: the non-farm payroll data has reignited concerns about rate hikes, the chip sector has strengthened against the trend based on industry fundamentals, and the escalation of the Iran-Israel conflict in the Strait of Hormuz has added a geopolitical premium to oil prices. Together, these factors suggest that volatility this week is likely to remain high.