Global Highlights This Week: August Non-Farm Data Arrives, Fed Governor Cook’s Fate Moves Markets
Last week, the three major U.S. stock indices all hit new historical closing highs but recorded declines on a weekly basis. The S&P 500 index fell 0.1% for the week, while the Dow and Nasdaq each dropped 0.19%.
The highlight of the U.S. stock market this week will be the release of the August non-farm employment data on Friday, a key indicator of economic health that will test investor expectations for Federal Reserve rate cuts.
The Fed’s next interest rate meeting is scheduled for September 16-17, with markets widely expecting a 25-basis-point cut, based on signs of a slowing labor market in the July non-farm report and hints from officials, including Fed Chair Powell, that a September cut is likely.
While the likelihood of a September cut is largely settled, the August non-farm employment report will help gauge the potential for further cuts beyond September.
Citi analysts noted in a report, “If the labor market continues to weaken into the fall, it will be a clear signal for additional rate cuts after September.”
Before Friday’s critical data, investors will receive several labor market clues: Wednesday’s July JOLTS job openings data, and Thursday’s August ADP private employment and initial jobless claims figures.
Investors will also watch speeches from several Fed officials, including St. Louis Fed President Musalem, New York Fed President Williams, and Chicago Fed President Goolsbee.
Additionally, the Fed will release the Beige Book on Wednesday, compiling various surveys on economic conditions.
Other significant data includes the U.S. Institute for Supply Management (ISM) August manufacturing and services surveys. On Thursday, the U.S. government will release July goods and services trade deficit data, with expectations of a significant widening due to a pre-tariff hike import surge, per preliminary figures.
Meanwhile, Fed personnel changes are rattling markets. U.S. President Trump recently decided to replace Fed Governor Cook, aiming to reshape the board. Cook has filed a lawsuit, arguing the president lacks authority to remove him.
On Friday, a federal court in Washington, D.C., held a hearing on the case, with the judge not issuing an immediate ruling and requesting Cook’s legal team to submit written arguments by Tuesday, detailing why the Trump administration’s decision to oust him is unlawful.
On the earnings front, with Nvidia releasing its latest results last week, the peak of the U.S. Q2 earnings season has passed, but this week still features notable corporate reports, including Broadcom’s after-hours release on Thursday.
(This week’s earnings highlights)
Notably, U.S. markets will be closed Monday for the Labor Day holiday.
Historically, September tends to be a risky month for U.S. stocks. According to the *Stock Trader’s Almanac*, over the past 35 years, September has been the worst-performing month for the S&P 500, averaging a 0.8% decline, with 18 down years compared to 17 up years—the only month with more declines than gains.
Overview of Key Overseas Economic Events This Week
Monday: Germany/France/Eurozone August manufacturing PMI final, Eurozone July unemployment rate, UK August manufacturing PMI final
Tuesday: Eurozone August CPI preliminary, U.S. August S&P Global manufacturing PMI final, U.S. August ISM manufacturing PMI
Wednesday: U.S. July JOLTS job openings, Germany/France/Eurozone August services/composite PMI final
Thursday: U.S. August ADP employment, U.S. August S&P Global services/composite PMI final, U.S. August ISM non-manufacturing PMI, Fed releases Beige Book
Friday: Eurozone Q2 GDP annual revision, U.S. August adjusted non-farm employment, U.S. August unemployment rate, UK July adjusted retail sales