[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.9%), and DJIA (-0.1%) are modestly improved from their opening levels as crude oil gives back some of this morning's gains, moving back below the $88 per barrel mark.

The ISM Manufacturing Index decreased to 54.6% in August (Briefing.com consensus: 55.3%) from 55.6% in July. The dividing line between expansion and contraction is 50.0%, so the August figure suggests manufacturing activity expanded in August from the prior month but at a slower pace.

The key takeaway from the report is that slower growth was indicated across most report categories. The notable exception was prices, which increased at the same pace as the prior month.

Construction spending decreased 0.5% month-over-month in July (Briefing.com consensus: 0.2%) following an upwardly revised unchanged reading (from -0.1%) for June. On a year-over-year basis, construction spending was down 3.8%.

The key takeaway from the report is the weakness in the residential sector and particularly in new single-family construction, which is being tested by higher financing costs.

[BRIEFING.COM] Stocks are off to a mostly lower start following yesterday's broad retreat, with considerable weakness across technology names weighing heavily on the Nasdaq Composite (-1.1%) while the S&P 500 (-0.6%) and DJIA (-0.4%) hold more modest losses.

Crude oil continues to move higher this morning, currently up $2.60 (+3.0%) to $88.37 per barrel. In combination with rising interest rates, the spike in oil has set the market up for relatively broad opening weakness, though the energy sector (+1.2%) is unsurprisingly a standout.

The information technology sector (-1.3%), which managed a modest gain yesterday's action, is a laggard today, pressured by a 2.9% slide in the PHLX Semiconductor Index.

The consumer discretionary sector (-1.4%) is also a point of weakness as Tesla (TSLA 358.81, -9.14, -2.49%) gives back the bulk of yesterday's advance.

Meanwhile, the defensive consumer staples (+0.9%) and health care (+0.5%) sectors hold decent gains as investors rotate out of more growth-oriented and cyclical sectors of the market. Dollar Tree (DLTR 129.83, +3.24, +2.56%) is among the top-performing S&P 500 components, while managed care names largely outperform.

On the economic data front, the final reading of the S&P Global U.S. Manufacturing PMI came in at 53.9, from the prior reading of 53.2.

Construction spending decreased 0.5% month-over-month in July (Briefing.com consensus: 0.2%) following an upwardly revised unchanged reading (from -0.1%) for June.

The ISM Manufacturing Index decreased to 54.6% in August (Briefing.com consensus 55.3%) from 55.6% in July.

The July Job Openings and Labor Turnover Survey reported 7.271 million job openings (Briefing.com consensus 7.39 million), from a downwardly revised prior reading of 7.182 million (from 7.359 million).

Equity futures remain lower as rising interest rates around the globe and higher oil prices amid continued U.S.-Iran tensions are keeping inflation concerns in focus ahead of the opening bell. 

Iranian President Masoud Pezeshkian said Iran is willing to return to the memorandum of understanding with the U.S., provided Washington also fulfills its commitments. The comments might ordinarily be expected to ease some of the geopolitical premium in crude prices, but oil has continued to climb, suggesting traders remain skeptical that the offer will lead to an immediate de-escalation and are awaiting a response from President Trump.

U.S. equity futures continue to point to a lower open as rising global bond yields and higher oil prices remain key headwinds. The S&P 500 futures currently trade 57 points below fair value. 

Equity indices in the Asia-Pacific region began September on a mostly lower note. There was some focus on an NHK report that Treasury Secretary Bessent told top Japanese officials that more rate hikes are needed. That said, the market was already pretty confident that a September rate hike will take place before this report. Japan's Ministry of Finance sold 10-yr JGBs to good demand, though the 10-yr yield still climbed to a fresh 2026 high just shy of 3.00%. Japan will spend JPY616 bln to extend fuel subsidies. China's RatingDog Manufacturing PMI (51.5) for August showed continued growth, bucking the trend seen in official PMI readings.

• In economic data:
  • China's August RatingDog Manufacturing PMI rose to 51.5 from 50.9, above the 51.0 consensus.
  • Japan's Q2 capital spending increased 1.6% yr/yr after no growth in Q1, versus an expected 0.2% decline.
  • Japan's August Manufacturing PMI rose to 54.9 from 54.5, just below the 55.1 consensus.
  • Japan's August Household Confidence rose to 35.5 from 34.9, above the 35.3 consensus.
  • South Korea's August trade surplus widened to $34.75 bln from $30.39 bln, exceeding the expected $30.70 bln surplus.
  • South Korea's August imports increased 22.5% yr/yr, below the 24.7% consensus and 26.5% in July.
  • South Korea's August exports increased 68.7% yr/yr, above the 62.6% consensus and 63.0% in July.
  • South Korea's August Manufacturing PMI fell to 52.3 from 53.1.
  • Australia's August Manufacturing PMI was unchanged at 52.0, as expected.
  • Australia's Q2 current account deficit widened to AUD27.2 bln from AUD25.4 bln, but was smaller than the expected AUD29.7 bln deficit.
  • Australia's July Building Approvals fell 3.6% m/m after increasing 6.9%, versus an expected 4.7% decline.
  • Australia's July Private House Approvals fell 4.2% m/m after increasing 0.4%.
  • India's August Manufacturing PMI fell to 52.8 from 53.5, just below the 52.9 consensus.

---Equity Markets---

• Japan's Nikkei: -0.2%
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: -0.2%
• India's Sensex: UNCH
• South Korea's Kospi: +0.2%
• Australia's ASX All Ordinaries: -0.1%

Major European indices trade in the red. The eurozone's Manufacturing PMI for August (52.7) showed stronger than expected growth, thanks in large part to an-above consensus reading from Germany (54.3; expected 54.1). European Central Bank policymaker Rehn said that the conflict in Iran could keep inflation elevated and that the ECB can't show complacency. British Prime Minister Burnham is expected to announce measures to reduce the cost of living later today.

• In economic data:
  • The eurozone's August Manufacturing PMI rose to 52.7 from 51.9, just below the 52.8 consensus.
  • The eurozone's flash August CPI increased 2.9% m/m after rising 0.2% in July.
  • The eurozone's flash August CPI was up 3.3% yr/yr, as expected, accelerating from 2.9%.
  • The eurozone's flash August core CPI increased 0.2% m/m after being unchanged in July.
  • The eurozone's flash August core CPI was up 2.4% yr/yr, below the 2.5% consensus and July reading.
  • The eurozone's July unemployment rate was unchanged at 6.4%, above the 6.3% consensus.
  • Germany's July retail sales fell 3.4% m/m after being unchanged, versus an expected 0.4% increase.
  • Germany's July retail sales fell 2.5% yr/yr after increasing 5.3%.
  • Germany's August Manufacturing PMI rose to 54.3 from 52.2, above the 54.1 consensus.
  • The U.K.'s August Nationwide HPI increased 0.2% m/m after falling 0.1%, above the 0.1% consensus.
  • The U.K.'s August Nationwide HPI increased 1.6% yr/yr, below the 2.1% consensus but up from 1.4%.
  • The U.K.'s August Manufacturing PMI slipped to 51.7 from 51.9, above the 51.5 consensus.
  • U.K. net lending to individuals fell to GBP6.30 bln in July from GBP9.50 bln, below the GBP7.20 bln consensus.
  • U.K. mortgage approvals fell to 56,050 in July from 58,220, below the 59,000 consensus.
  • France's August Manufacturing PMI rose to 51.1 from 49.8, below the 51.5 consensus.
  • Italy's August Manufacturing PMI fell to 49.6 from 51.3, below the 51.4 consensus.
  • Italy's Q2 GDP increased 0.2% qtr/qtr, as expected and unchanged from Q1.
  • Italy's Q2 GDP increased 1.0% yr/yr, as expected, accelerating from 0.8%.
  • Italy's July unemployment rate was unchanged at 5.8%, above the 5.6% consensus.
  • Italy's flash August CPI increased 0.5% m/m, as expected, after rising 0.3% in July.
  • Italy's flash August CPI increased 3.3% yr/yr, accelerating from 2.9%.
  • Spain's August Manufacturing PMI fell to 49.5 from 50.2, below the 50.3 consensus.
  • Swiss retail sales increased 2.3% yr/yr in July, above the 1.6% consensus and 1.9% in June.
  • The Swiss August Manufacturing PMI rose to 57.1 from 53.2, above the 54.1 consensus.

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: -1.0%
• U.K.'s FTSE 100: -0.5%
• France's CAC 40: -0.2%
• Italy's FTSE MIB: -0.9%
• Spain's IBEX 35: -0.6%

Selling pressure remains broad in premarket trade, with semiconductor weakness adding to the pressure from rising global bond yields. The S&P 500 futures currently trade 55 points below fair value.

Japan's 10-year government bond yield has now reached 3.00% for the first time since 1996, advancing from just below that threshold earlier this morning. That move reinforces inflation, deficit, and bond-supply concerns across global markets, with the U.S. 10-year yield up three basis points to 4.79%.

Equity futures point to a lower open this morning as the market navigates rising global bond yields and another spike in oil prices. The upward pressure on yields has resulted in broad weakness across overseas equity markets. Another increase in the price of oil has contributed to the selling after reports of cargo ships being attacked in the Strait of Hormuz, as crude oil climbs $2.03 (+2.4%) to $87.79 per barrel.

The major averages finished August with solid gains, though action was choppy as geopolitical developments and sharp swings in technology stocks repeatedly influenced market direction. Those same themes remain in focus to begin September, with renewed tensions surrounding the Strait of Hormuz pushing oil prices higher while rising global bond yields provide an additional headwind for equities.

On the data front, the August ISM Manufacturing Index and July JOLTS report are due at 10:00 a.m. ET, along with July construction spending, and should help shape the market's view of economic growth and labor demand.

Today's remaining economic calendar:

• 9:45 AM ET: August S&P Global U.S. Manufacturing PMI - Final; prior 53.2
• 10:00 AM ET: July Construction Spending; Briefing.com consensus 0.2%; prior -0.1%
• 10:00 AM ET: August ISM Manufacturing Index; Briefing.com consensus 55.3%; prior 55.6%
• 10:00 AM ET: July JOLTs - Job Openings; Briefing.com consensus 7.390M; prior 7.359M

In corporate news:

• Anthropic agreed to a $35 billion cloud computing deal with NVIDIA (NVDA 217.81, -2.97, -1.4%) supported Lambda, according to The Wall Street Journal.
• Medtronic (MDT 95.25, +4.60, +5.07%) beat fiscal first-quarter earnings and revenue estimates and raised its fiscal 2027 guidance.
• Novartis (NVS 159.90, +7.84, +5.16%) said remibrutinib met the primary endpoint in two Phase III trials for relapsing multiple sclerosis and showed superiority across all key secondary endpoints.

Reviewing overnight developments:

Asia-Pacific markets began September on a mostly lower note as investors considered the outlook for Japanese monetary policy and mixed regional manufacturing data. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: -0.2%, India's Sensex: UNCH, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: -0.1%.

In news:

• NHK reported that Treasury Secretary Bessent told senior Japanese officials that additional rate hikes are needed, though expectations for a September increase were already elevated.
• Japan's 10-year JGB auction drew good demand, while the 10-year yield reached a fresh 2026 high just below 3.00%.
• Japan will spend JPY616 billion to extend fuel subsidies.

In economic data:

• China's August RatingDog Manufacturing PMI 51.5 (expected 51.0; last 50.9)
• Japan's Q2 Capital Spending 1.6% yr/yr (expected -0.2%; last 0.0%) and August Manufacturing PMI 54.9 (expected 55.1; last 54.5). August Household Confidence 35.5 (expected 35.3; last 34.9)
• South Korea's August trade surplus $34.75 bln (expected surplus of $30.70 bln; last surplus of $30.39 bln). August Imports 22.5% yr/yr (expected 24.7%; last 26.5%) and Exports 68.7% (expected 62.6%; last 63.0%). August Manufacturing PMI 52.3 (last 53.1)
• Australia's August Manufacturing PMI 52.0, as expected (last 52.0). Q2 Current Account deficit AUD27.2 bln (expected deficit of AUD29.7 bln; last deficit of AUD25.4 bln). July Building Approvals -3.6% m/m (expected -4.7%; last 6.9%) and Private House Approvals -4.2% m/m (last 0.4%)
• India's August Manufacturing PMI 52.8 (expected 52.9; last 53.5)

Major European markets trade lower as investors assess firmer eurozone inflation, uneven manufacturing readings, and central-bank commentary. STOXX Europe 600: -0.7%, Germany's DAX: -1.1%, U.K.'s FTSE 100: -0.8%, France's CAC 40: -0.3%, Italy's FTSE MIB: -1.1%, Spain's IBEX 35: -1.0%.

In news:

• ECB policymaker Rehn said the conflict in Iran could keep inflation elevated and that the central bank cannot show complacency.
• British Prime Minister Burnham is expected to announce measures aimed at reducing the cost of living later today.

In economic data:

• Eurozone's August Manufacturing PMI 52.7 (expected 52.8; last 51.9). Flash August CPI 2.9% m/m (last 0.2%); 3.3% yr/yr, as expected (last 2.9%). Flash August Core CPI 0.2% m/m (last 0.0%); 2.4% yr/yr (expected 2.5%; last 2.5%). July Unemployment Rate 6.4% (expected 6.3%; last 6.4%)
• Germany's July Retail Sales -3.4% m/m (expected 0.4%; last 0.0%); -2.5% yr/yr (last 5.3%). August Manufacturing PMI 54.3 (expected 54.1; last 52.2)
• U.K.'s August Nationwide HPI 0.2% m/m (expected 0.1%; last -0.1%); 1.6% yr/yr (expected 2.1%; last 1.4%). August Manufacturing PMI 51.7 (expected 51.5; last 51.9). July Net Lending to Individuals GBP6.30 bln (expected GBP7.20 bln; last GBP9.50 bln) and July Mortgage Approvals 56,050 (expected 59,000; last 58,220)
• France's August Manufacturing PMI 51.1 (expected 51.5; last 49.8)
• Italy's August Manufacturing PMI 49.6 (expected 51.4; last 51.3). Q2 GDP 0.2% qtr/qtr, as expected (last 0.2%); 1.0% yr/yr, as expected (last 0.8%). July Unemployment Rate 5.8% (expected 5.6%; last 5.8%). Flash August CPI 0.5% m/m, as expected (last 0.3%); 3.3% yr/yr (last 2.9%)
• Spain's August Manufacturing PMI 49.5 (expected 50.3; last 50.2) Swiss July Retail Sales 2.3% yr/yr (expected 1.6%; last 1.9%). August Manufacturing PMI 57.1 (expected 54.1; last 53.2)

[BRIEFING.COM] The major averages finished a broadly weaker Monday off their session lows, as late buying interest in technology stocks helped the S&P 500 (-0.3%) and Nasdaq Composite (-0.1%) recover some of their earlier losses. The DJIA (-0.7%) underperformed as rising oil prices and renewed hostilities between the U.S. and Iran weighed on sentiment throughout the session.

Crude oil was a central influence on today's action, settling $2.45 higher (+2.9%) at $85.83 per barrel and recovering a large portion of last week's decline. The move followed the latest hostilities between the U.S. and Iran, while Axios reported during the afternoon that President Trump is considering limited strikes aimed at preventing Iran from reconstituting its capabilities to attack ships in the Strait of Hormuz. The energy sector (+2.1%) was the clear beneficiary, finishing comfortably atop the sector standings.

Most of the market moved in the opposite direction, however, with the Russell 2000 (-0.5%) and S&P Mid Cap 400 (-0.5%) also ending lower.

Technology stocks provided an important source of support, particularly late in the session. The information technology sector (+0.3%) moved into positive territory as semiconductor stocks attracted buying interest shortly before the close, helping pull the major averages off their session lows. The PHLX Semiconductor Index (+0.6%) finished modestly higher and ended August with a 2.0% gain despite considerable volatility throughout the month. NVIDIA (NVDA 220.50, +2.95, +1.36%) was among today's semiconductor standouts after last week's earnings-driven surge.

Elsewhere in the technology sector, CrowdStrike (CRWD 231.00, +12.60, +5.77%) extended its own post-earnings advance to finish as the top-performing S&P 500 component.

Mega-cap performance was less encouraging overall, leaving the Vanguard Mega Cap Growth ETF down 0.2% as most of the Magnificent Seven finished lower. The communication services sector (-1.6%) was among the weakest groups as Alphabet (GOOG 335.41, -7.47, -2.18%) lagged, while Amazon (AMZN 259.77, -6.66, -2.50%) pressured the consumer discretionary sector (-0.7%) after The Wall Street Journal reported that the FTC plans to file a lawsuit against the company. Tesla (TSLA 368.01, +19.26, +5.52%) bucked the broader mega-cap weakness, rallying sharply and climbing back above its 50-day moving average (359.81) amid enthusiasm surrounding autonomous driving and energy-storage developments. Elon Musk's comments outlining an aggressive goal of reaching 100 GW of annual solar production also contributed to the positive sentiment surrounding the stock.

Selling pressure also remained pronounced in several other areas. The utilities (-1.2%) and industrials (-1.2%) sectors finished with sizable losses. Edison (EIX 53.96, -16.21, -23.10%) and PG&E (PCG 13.28, -3.32, -20.00%) continued to weigh heavily on the utilities sector following developments surrounding California wildfire legislation, while weakness across military contractors pressured the industrials sector. Howmet Aerospace (HWM 244.91, -19.94, -7.53%) was a notable laggard after Elon Musk said in-house SpaceX (SPCX 143.75, +2.25, +1.59%) casting of natural-gas turbine blades and vanes could accelerate turbine deployment by up to 18 months.

In other corporate news, Aon (AON 321.34, -34.06, -9.58%) fell sharply after agreeing to acquire USI Insurance Services for $17.0 billion in cash.

Ultimately, Monday's session featured broad underlying weakness as the renewed rise in crude oil prices and U.S.-Iran tensions weighed on sentiment. The energy sector was the clear exception, while late strength in semiconductors and other technology stocks helped the major averages recover from their lows and limited the losses at the index level. Despite ending the final trading day of August on a lower note, the major averages still secured solid gains for the month.

U.S. Treasuries ended August with losses in most tenors, producing fresh 2026 highs in yields on 3-year, 5-year, 7-year, and 10-year notes. The 2- year note yield finished unchanged at 4.35% (+6 basis points in August), and the 10-year note yield settled up four basis points to 4.76% (+1 basis point in August). 

There was no economic data of note. 

• Russell 2000: +19.1% YTD
• S&P Mid Cap 400: +13.8% YTD
• Nasdaq Composite: +13.5% YTD
• S&P 500: +12.3% YTD
• DJIA: +10.7% YTD