Following the Labor Day holiday, U.S. equity markets reopened on September 2, 2025 amid renewed concerns about macro and geopolitical headwinds. Market participants pointed to the traditionally weak September performance for risk assets, intensified by discussion around potential new tariffs and upcoming economic reports.
The S&P 500 opened sharply lower but retraced early losses as dip buyers stepped in. However, traders remain cautious ahead of key data including August ISM manufacturing and non-farm payrolls, both of which could sway Fed rate-cut expectations. A stronger-than-expected ISM reading would renew concerns about persistent inflation, while softer figures might bolster the case for easing monetary policy.
Equity implied volatility indexes have edged higher, reflecting growing hedging activity. Treasury yields also rose, with the 10-year note climbing above 4.5% as traders reprice interest-rate trajectories. Tariff rhetoric from Washington compounded uncertainty, prompting multinational corporates and cross-asset traders to reassess broader risk exposures.
In digital-asset markets, bitcoin softened from recent highs near $112,000, trading below $110,000 amid profit-taking and correlation with equities. Ethereum exhibited similar patterns, with staking yields and ETF flows providing some support. Crypto-native indicators signal elevated funding-rate pressures, suggesting traders have been overleveraged at these price levels.
The convergence of end-of-summer repositioning, policy developments and data catalysts marks a pivotal week for global markets. Investors across asset classes are increasingly deploying dynamic hedges, as the path for central-bank accommodation and trade-policy direction remains uncertain.
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