The market is under significant pressure as we kick off September, with tech stocks, especially semiconductors, leading the downturn. The sharp declines in companies like Nvidia, AMD, and Intel reflect investor concerns not only about the broader economy but also potential sector-specific challenges, like the news of subpoenas for Nvidia. This kind of selling momentum, combined with the weak manufacturing data from the ISM report, seems to be reigniting recession fears and raising doubts about the resilience of the U.S. economy.

With the major indices posting their worst losses since early August, the market is clearly in a risk-off mode, and investors are looking to upcoming data—particularly Friday’s jobs report and today’s JOLTS numbers—for any signs that might influence the Federal Reserve’s next move on interest rates. The labor market data will be crucial in determining whether the Fed opts for a 25 or 50 basis point rate cut at the upcoming meeting.

The slight rise in the dollar and drop in 10-year Treasury yields indicate that safe-haven demand is picking up, as traders become more cautious about the economic outlook. The drop in Treasury yields also suggests that markets are increasingly pricing in the possibility of a rate cut, which could be a response to signs of slowing growth.

With earnings reports from companies like Dick’s Sporting Goods and Dollar Tree coming up, it’ll be interesting to see how consumer-focused sectors perform amid this backdrop. Overall, it’s clear that sentiment is fragile, and the upcoming labor data will be a key factor in determining whether the market stabilizes or continues to decline.

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