Morning Wrap: ASX 200 futures flat, hot US August payrolls drag the S&P 500 and Dow lower

In a nutshell:

• Major US benchmarks snapped Thursday's rally to finish lower and near worst levels, after August payrolls came in at nearly triple ests causing an intraday slide

• Short-end of the curve edged higher, with the US 2-year yield up 3 bps to 4.37%, with Citigroup pushing pushing its next Fed cut call all the way out to June 2027

• US forces struck three Iranian crude tankers on Sunday after the IRGC fired ballistic missiles at a US carrier and destroyer, with crude already logging its best week since July

Let's dive in.

• Major US benchmarks finished lower and near worst levels after an early jobs-driven slide that never fully repaired

• Over the week the major benchmarks were little changed with the Dow (-0.3%) the only loser, while the S&P 500 added 0.1% and the Nasdaq Composite rose 0.4%, leaving the three benchmarks mixed heading into the Labor Day break

• US 2-year yield snapped a two day slide to hit its highest since January 2025 intraday, climbing as much as 8bps before paring, finishing up 4bps at 4.37%, while the 10-year added one basis point to 4.78%

• Breadth was weak with only three of the 11 S&P 500 sectors advancing – technology, industrials and utilities – with healthcare, consumer discretionary, communication services and energy the day's weakest

• Chipmakers rallied against the tape with Marvell up 7%, Micron up 6.1%, AMD up 4.7%, Intel up 4.5% and Nvidia up 0.8% after underperforming earlier in the week

• Mega-cap tech dragged on the Dow, as higher discount rates hit the longest-duration names with Apple (-2.5%), Alphabet (-2.1%) and Microsoft (-2.05%) all lower

• The Russell 2000 bucked the tape and rose 0.25%, an unusual result for the yield-sensitive small-cap index on a 'good news is bad news' day

• Brent settled at US$95.84 a barrel for a weekly gain of 8%, its best week since July, with the November contract rollover complicating week-on-week comparisons 

• Spot gold snapped two days of gains fell to about US$4,427/oz, as the dollar and yields firmed

• Norway's sovereign wealth fund proposed deep cuts to US Treasuries, recommending its government bond subindex fall to 50% from 70% and shifting roughly $80bn out of a $215bn Treasury book (RT)

• Lululemon closed at $100.61, down 17.3% and its lowest since May 2018, after Q2 revenue fell 4% to $2.42bn against ests of $2.46bn, comps dropped 9% and full-year revenue guidance was cut a third time to $10.35bn to $10.5bn against ests of $11.03bn (BBG)

• Tesla was down 5.9%, its worst day in six weeks, after an invite-only Austin Cybercab rollout that was not streamed and that Elon Musk skipped, with the NHTSA opening a probe into the data behind Tesla's self-certification of the steering-wheel-free vehicle (BBG)

• OpenAI rolled out GPT-6 Astra, the first model it classifies at the critical cybersecurity threshold, releasing it to Daybreak program business users with a guardrailed version for paid ChatGPT subscribers (BBG)

• US forces struck three Iranian crude tankers on Saturday, disabling two near Kharg Island and destroying a third in the Gulf of Oman after directing its crew to abandon ship (BBG)

• The strikes followed IRGC ballistic missile launches at two US Navy warships, with CENTCOM saying a carrier and a guided-missile destroyer evaded multiple attacks and no personnel were harmed (AJ)

• CENTCOM commander Admiral Brad Cooper set out the exchange rate explicitly, saying that if Iran shoots at two US ships the US will take out three of Iran's and destroy its limited and exposed oil fleet if necessary (CNBC)

• Iran's foreign ministry called the strikes illegal and aggressive, accusing Washington of waging a naval blockade and economic war and describing the attacks as a war crime under the UN Charter (NBC)

• Trump played the conflict down, calling the war in Iran small potatoes and not a big thing for the US and saying America has essentially taken over Iran (ABC)

• The Treasury sanctioned a small Turkish investment bank and two subsidiaries on Friday, accusing them of facilitating funds for an arm of the Revolutionary Guard, a day before the tanker strikes (CNBC)

• Hormuz transit volumes collapsed late in the week, with just four commodity vessels crossing on Thursday against a 10-day average near 15, the tightest physical read of the campaign so far (RT)

• Trump threatened to cut off trade with deficit countries unless the Fed lowers rates, escalating his pressure campaign in a lengthy social media post after the jobs report (BBG)

• Trump doubled down in the Oval Office on Friday afternoon, saying the US should pay the lowest rate in the world and that each percentage point of interest costs the country $650bn (CNBC)

• The president claimed legal cover from February's Supreme Court ruling, which struck down his emergency-powers tariffs but which he says preserved a right to halt trade instead, adding that it is better than tariffs (CNN)

• National Economic Council director Kevin Hassett broke from the White House line, telling CNBC on Friday morning that the argument for holding steady would be pretty strong (CNBC)

• The ECB is expected to hike 25 basis points on 10 September, taking the deposit rate to 2.50%, with headline euro-area inflation at 3.3% and Lagarde likely to withhold guidance beyond the meeting (FXStreet)

• The BoJ is leaning towards a 25 basis point hike this month, with pricing for an outsized 50 basis point move collapsing to about 5% from roughly 40% at one point (BBG)

• The yen touched 155.28 on Thursday, its strongest since 3 August, with the rally fuelled by speculation over a shift in Government Pension Investment Fund asset allocation and faster BoJ tightening (CNBC)

• UBS joined NAB and Deutsche Bank in calling an RBA hike on 29 September, which would take the cash rate to 4.60%, citing inflation that is too high and a global AI and trade cycle boom (ABC)

• US nonfarm payrolls rose 162,000 in August, topping every estimate in a Bloomberg survey and marking the strongest month since March, with the unemployment rate steady at 4.1% (BBG)

• The prior two months were revised up by a combined 55,000, with July flipping from a reported 23,000 loss to a 21,000 gain and June lifted 11,000 to 31,000 (NBC)

• OPEC+ kept its output policy unchanged for October, an audit of each member's production capacity is underway to calculate production limits for 2027 (BBG)

• Petrol averaged about US$4.09 a gallon into the Labor Day weekend, up 27% year-on-year, with the Strategic Petroleum Reserve at its emptiest since the early 1980s (CNN)

• US mortgage rates hit a fresh 2026 high, marching closer to 7% as the global long-end selloff fed through to household borrowing costs (CNN)

It's still crickets out there!

• Choppy times: A busy overnight lead on catalysts and headlines, but the bigger point is the chop ahead of us. Major US benchmarks finished mostly lower as we enter a heightened 'good news is bad news' phase, with bond yields high enough that a weaker economy is now the outcome equities actually want (yep, we need jobs/growth to tank, to calm yields and bring rate cuts back into view). Our overnight ETF watchlist was relatively quiet, the main movers being Gold Miners and Software, both down around 2%. Beyond that, the market keeps walking a stressful line. Yields are parked at multi-year and in places multi-decade highs, Brent is not far off US$100 and the Fed debate is still one hike or two by year end.

Stocks trading ex-dividend: 

• Mon 7 Sep: Adairs (ADH) – $0.06, Alkane Resources (ALK) – $0.02, Beam Communications Holdings (BCC) – $0.014, Enero Group (EGG) – $0.014, HUB24 (HUB) – $0.42, Michael Hill International (MHJ) – $0.02, Perseus Mining (PRU) – $0.09, Pro Medicus (PME) – $0.37, Super Retail Group (SUL) – $0.33, WT Financial Group (WTL) – $0.007

• Tue 8 Sep: AUB Group (AUB) – $0.71, Bluescope Steel (BSL) – $1.35, Channel Infrastructure NZ (CHI) – $0.051, Dusk Group (DSK) – $0.016, Mineral Resources (MIN) – $0.83, Motorcycle Holdings (MTO) – $0.07, News Corporation (NWS) – $0.099, Peet (PPC) – $0.065, Pepper Money (PPM) – $0.072, Perpetual Equity Investment Company (PIC) – $0.04, Regis Healthcare (REG) – $0.094, Saferoads Holdings (SRH) – $0.005, Smartgroup Corporation (SIQ) – $0.215

• Wed 9 Sep: Bhagwan Marine (BWN) – $0.003, Brambles (BXB) – $0.328, CSL (CSL) – $2.277, Evolution Mining (EVN) – $0.21, EVT (EVT) – $0.23, Genesis Minerals (GMD) – $0.05, Hearts and Minds Investments (HM1) – $0.1, IDP Education (IEL) – $0.06, IGO (IGO) – $0.05, IVE Group (IGL) – $0.09, LGI (LGI) – $0.014, Netwealth Group (NWL) – $0.21, Northern Star Resources (NST) – $0.3, Summerset Group Holdings (SNZ) – $0.027 

• Thu 10 Sep: AMA Group (AMA) – $0.005, Breville Group (BRG) – $0.19, CTI Logistics (CLX) – $0.08, Freightways Group (FRW) – $0.199, Globe International (GLB) – $0.13, Infragreen Group (IFN) – $0.005, Kogan.com (KGN) – $0.08, McMillan Shakespeare (MMS) – $0.7, Naos Ex-50 Opportunities Company (NAC) – $0.016, Naos Small Cap Opportunities Company (NSC) – $0.013, Nine Entertainment Co. Holdings (NEC) – $0.03, NZME (NZM) – $0.025, Perpetual (PPT) – $0.63, Regis Resources (RRL) – $0.2, Sandfire Resources (SFR) – $0.35, SGH (SGH) – $0.32, Sky Network Television (SKT) – $0.141, Spark New Zealand (SPK) – $0.061, Thorney Opportunities (TOP) – $0.017, Venus Metals Corporation (VMC) – $0.17, XRF Scientific (XRF) – $0.045

• Fri 11 Sep: Ariadne Australia (ARA) – $0.005, CAR Group (CAR) – $0.435, Cleanaway Waste Management (CWY) – $0.035, Joyce Corporation (JYC) – $0.17, PM Capital Global Opportunities Fund (PGF) – $0.075, WiseTech Global (WTC) – $0.123

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Group 6 Metals (G6M), Carnarvon Energy (CVN), Gold Hydrogen (GHY), Jindalee Lithium (JLL), Maritana Minerals (MRT), PointsBet Holdings (PBH), Sunrise Energy Metals (SRL), Syrah Resources (SYR)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• None