On Monday, the S&P 500 Index ($SPX) closed down by 0.28%, dipping to a 2.5-week low, while the Dow Jones Industrial Average ($DOWI) rose by 0.26%. The Nasdaq 100 Index ($IUXX) fell by 0.97%, reaching a 3-week low. E-mini S&P futures (ESU26) decreased by 0.27%, and September E-mini Nasdaq futures (NQU26) declined by 0.95%. This market pressure followed the breakdown of trade talks between the U.S. and Canada, resulting in a 50% tariff on approximately $20 billion of Canadian goods starting September 8.
In economic news, the July Chicago Fed national activity index fell to -0.08, better than the projected -0.09. Additionally, U.S. Treasury Secretary Scott Bessent announced a campaign to sever Iran from the global economy, warning that nations doing business with Iran may face U.S. sanctions. Meanwhile, crude oil prices dropped more than 2%, contributing to the decline in inflation expectations, with the 10-year T-note yield decreasing by 3 basis points to 4.70%.
Internationally, stock markets also showed declines, with the Euro Stoxx 50 down by 0.22% and China’s Shanghai Composite dropping by 0.59%. The markets are currently assessing a 43% likelihood of a 25 basis point interest rate hike at the Federal Open Market Committee meeting scheduled for September 15-16.
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