U.S. equities closed in negative territory on Thursday, with all three major indexes posting losses as Treasury yields climbed following the release of the latest employment figures. Energy prices steadied while trading volumes remained thin ahead of the long Labor Day weekend in the United States.
The session saw Micron Technology announce ambitious plans to significantly expand its HBM production capacity this year, while Nvidia signaled intentions to invest in multiple companies. Among Chinese stocks listed in the U.S., performance was mixed, with Silicon Motion surging over 8% while Youdao fell more than 5%.
In commodities, WTI crude inched higher, copper prices advanced, and gold climbed. Oil stabilized as traders stayed on the sidelines ahead of the long U.S. weekend. European shares recorded their third weekly decline in four weeks, pressured by a strong U.S. jobs report that boosted rate hike expectations.
Geopolitically, Ukraine's national security agency came under attack, potentially altering plans for a U.S. presidential envoy visit. In Sudan's southern region, an armed assault killed 21 civilians. U.S. Commerce Secretary Lutnick disclosed income exceeding $250 million last year.
Former President Trump directed criticism at Federal Reserve Chair Powell, threatening to sever trade ties with surplus nations if rates are not cut. Trump also claimed markets should be "soaring like a rocket" and that U.S. interest rates should be among the lowest globally. He suggested the U.S. could soon strike Iran's nuclear facility at Fordow, while downplaying the impact of potential conflict, calling such disputes "a minor matter" for America. Additionally, Trump indicated his special envoy would present a proposal to Russia to end the Ukraine conflict, and floated allowing ranchers to sell beef directly to consumers, bypassing large meat processors.
On the macroeconomic front, strong non-farm payroll data provided ammunition for hawks, but whether the Fed moves on rates will hinge on upcoming inflation readings. U.S. manufacturing and construction job growth outpaced the services sector, possibly reflecting the impact of an AI investment boom. Fed official Hammack stated it is time to act to lower inflation. The dollar rebounded on the robust jobs report, though it still ended the week lower amid competing forces. European bonds saw UK gilts snap a weekly losing streak while German bunds gained.
In corporate news, Apple is entering the John Ternus era, preparing its largest product lineup ever. Blue Owl reportedly plans to create and list a data center REIT. Large tech firms are exploring ways to build data centers that gain public acceptance. Volkswagen is working to revitalize its U.S. operations. EQT is set to acquire insurance broker McGill Partners for $2 billion. U.S. highway safety regulators have initiated a probe into Tesla's Cybercab rollout. Elon Musk's The Boring Company is seeking investor help with hiring and business development. AI cloud firm Nscale is reportedly seeking $3.5 billion in pre-IPO funding. Bloom Energy, Illumina, and Everpure will be added to the S&P 500 index.
Analysts at BlackRock noted that after the surprisingly strong jobs data, next week's inflation figures become even more critical. One CEO remarked that due to employment data, "markets are not operating in a normal environment." Citigroup has pushed back its expected Fed rate cut timeline, now anticipating three cuts starting in 2027. The U.S. Treasury Secretary projected oil could fall to as low as $40 per barrel after the war ends, which would help pull Treasury yields lower. Fitch upgraded Portugal's credit rating to A+ with a stable outlook. In the U.S. bond market, short- and medium-term Treasuries declined following the robust jobs report, with focus now shifting to the CPI release.