To The Moon

U.S. stocks closed lower across the board on Friday, with the 2-year Treasury yield hitting its highest level since January 2025. August nonfarm payrolls rose by 162,000, significantly beating the 53,000 estimate from economists surveyed by Dow Jones, while the unemployment rate held steady at 4.1% in line with expectations.

Beyond the August figure, job growth for both June and July was revised upward. For the week, the Dow fell 0.3%, while the S&P 500 notched a 0.1% gain and the Nasdaq Composite added 0.4%. U.S. markets will be closed on Monday for a holiday.

At the closing bell, the Dow Jones Industrial Average dropped 272.51 points, or 0.51%, to 53,413.60. The S&P 500 slipped 29.29 points, or 0.38%, to 7,718.42. The Nasdaq Composite declined 77.07 points, or 0.29%, to 26,506.99. Tesla Inc (NASDAQ: TSLA) tumbled 5.92%, Apple Inc (NASDAQ: AAPL) fell 2.51%, and Microsoft Corp (NASDAQ: MSFT) lost 2.04%. In the AI chip sector, SanDisk Corp (NASDAQ: SNDK) surged 11.9%, SK Hynix Inc (OTC: SKHY) gained 8.14%, Micron Technology Inc (NASDAQ: MU) advanced 6.1%, and Intel Corp (NASDAQ: INTC) rose 4.51%. The Nasdaq Golden Dragon China Index added 0.89%, with XPeng Inc (NYSE: XPEV) down 1.75%, Baidu Inc (NASDAQ: BIDU) up 4.07%, and Alibaba Group Holding Ltd (NYSE: BABA) climbing 1.26%.

In European markets, Germany's DAX 30 rose 44.63 points, or 0.17%, to 26,052.20. The UK's FTSE 100 was flat at 10,831.77. France's CAC 40 slipped 7.63 points, or 0.09%, to 8,278.77. The Euro Stoxx 50 gained 11.86 points, or 0.19%, to 6,394.45. Spain's IBEX 35 advanced 44.81 points, or 0.22%, to 20,045.01, while Italy's FTSE MIB fell 139.97 points, or 0.27%, to 52,105.50.

Asian equities finished higher, with Japan's Nikkei 225 up 1.26% and South Korea's KOSPI gaining 1.64%.

The dollar index, which measures the greenback against six major currencies, rose 0.27% to settle at 99.177. At the close of New York trading, the euro traded at $1.1611, down from $1.1635 previously, and the pound was at $1.3514, down from $1.3539. Meanwhile, the dollar strengthened to 156.22 Japanese yen from 155.50, rose to 0.8102 Swiss francs from 0.8068, climbed to 1.3839 Canadian dollars from 1.3788, and advanced to 9.5775 Swedish kronor from 9.5365.

In cryptocurrencies, Bitcoin fell 1.8% to $79,694.5 at the time of writing, and Ethereum declined over 1.7% to $2,452.

Oil prices closed mixed. West Texas Intermediate crude for October delivery added 18 cents to settle at $91.48 per barrel, up 0.2%, while Brent crude for November delivery rose 76 cents to $96.28 per barrel, up 0.8%.

Precious metals declined, with spot gold falling 0.94% to $4,431.54 per ounce and spot silver down 1.12% to $66.218 per ounce.

Trump Downplays Iran Conflict as "Not a Big Deal" for the U.S.

President Donald Trump described the ongoing U.S.-Iran military confrontation, which has lasted over six months, as "insignificant" and said he would not characterize it as a major war. On Friday, Trump called it a "military conflict" that is "not a big deal for us," noting that the two sides are not engaged in sustained combat. Responding to Vice President JD Vance's comments that it should not be called a war, Trump said "that's true in many ways," adding that the U.S. is currently conducting intermittent strikes. Trump again compared the 18 U.S. military deaths in the conflict to the Vietnam War and Afghanistan War, saying "losing even one person is too many," though those wars resulted in tens of thousands of American deaths. He also claimed the U.S. has achieved significant results against Iran. Polls show low approval ratings for Trump's handling of the Iran conflict, and with energy prices elevated, Republicans face pressure in maintaining control of Congress in the November midterms. Democratic critics have also slammed administration officials for downplaying the conflict's impact.

Bessent Sees Oil Dropping to $40 After Iran Conflict Ends

Treasury Secretary Scott Bessent said oil prices could fall sharply to $40 per barrel once the Iran conflict concludes, with increased supply likely to push Treasury yields lower. Bessent stated that after the conflict, the oil market would see a surplus, with prices "possibly seeing $50 or $40 crude" as substantial supply enters the market. Due to the recent U.S.-Iran military tensions, Brent crude briefly climbed above $95 on Friday, with WTI approaching $90. Bessent noted that rising energy prices have intensified inflation concerns and pushed up global benchmark bond yields, with the 10-year Treasury yield hitting its highest level since 2023 this week. He also downplayed the impact of Norway's sovereign wealth fund reducing its U.S. Treasury holdings, saying the fund simply wants to allocate to other American assets, including Fannie Mae and Freddie Mac-related bonds.

Strong Jobs Data Bolster Rate Hike Bets Without Triggering Broad Risk-Off

Stronger-than-expected August jobs data prompted traders to reprice the likelihood of a Federal Reserve rate hike, yet no obvious panic emerged in Wall Street risk assets. The data revealed resilient labor market conditions, leading traders to raise expectations for a rate hike at the Fed's September 16 meeting. Treasury bonds were sold off, the dollar strengthened, and the S&P 500 fell on Friday, though it still posted a weekly gain. Unlike previous episodes where rising rates triggered capital outflows, this bond market adjustment has not yet spread to other risk assets. Credit spreads remain narrow, with limited pressure on corporate debt and equity index markets. JPMorgan noted a noticeable deterioration in Treasury liquidity, but corporate bond ETFs and equity index futures have not shown similar stress. Market resilience is largely attributed to economic growth and corporate earnings, particularly as AI investment continues to support significant capital expenditures by tech firms. Analysts point out that the market is currently more focused on whether yields will rise rapidly rather than the single jobs print itself. Going forward, attention will shift to inflation data and whether the Fed reconsiders its rate path due to inflationary pressures. If yields climb too quickly, investors may be forced to reduce risk exposure.

Fed's Hammack Says Inflation Still Too High, "Time to Act"

Cleveland Fed President Beth Hammack said that after speaking with businesses in the Fourth District, both economic data and corporate feedback indicate that current monetary policy is not restrictive enough and inflation remains too high, requiring action. Hammack noted that an executive at a mid-sized manufacturing firm in northeastern Ohio told her that even though his industry is typically impacted by high interest rates, he still believes the Federal Open Market Committee (FOMC) should raise rates because his company faces double-digit increases in many input costs. She said inflation is still above 3%, the labor market is stable and near her estimate of maximum employment, and businesses in the Fourth District report continued cost pressures, forcing them to make difficult choices. Hammack stated that both the data and business feedback send the same signal: policy has not reached a sufficiently restrictive level, and the longer inflation stays above target, the harder it will be to bring down. She said she will continue to monitor data and corporate feedback, adding, "What I'm hearing now is that it's time to act."

Justice Department Halts Antitrust Cooperation With Canada

According to reports, the antitrust division of the U.S. Department of Justice was instructed this week to suspend all cooperation with the Canadian government, marking the latest development in the escalating trade dispute between the two nations. Linda Marshall, head of the division's international affairs unit, emailed officials to cease cooperation with Canadian authorities on casework and policy matters without specifying a reason. Reports cited DOJ officials saying such directives are rare, as the U.S. typically maintains collaboration with foreign competition regulators even when government relations are strained. The two countries' antitrust agencies have a long history of cooperation, including on auto parts price-fixing cases, air cargo investigations, and merger reviews in the tech and aerospace sectors. This suspension comes amid intensifying trade tensions. Following the collapse of trade talks last month, the Trump administration imposed 50% tariffs on $20 billion worth of Canadian goods, prompting Canadian Prime Minister Mark Carney to retaliate with similar tariffs on select U.S. products. The Justice Department and the White House have not commented.

S&P Index Rebalance Adds Multiple Tech Names to Core Benchmarks

S&P Dow Jones Indices announced changes to several index compositions, including the S&P 100, S&P 500, and S&P MidCap 400, effective September 21, 2026. The S&P 100 will add Palo Alto Networks Inc (NASDAQ: PANW), Arista Networks Inc (NYSE: ANET), SanDisk Corp (NASDAQ: SNDK), and Dell Technologies Inc (NYSE: DELL), while removing Nike Inc (NYSE: NKE), Colgate-Palmolive Co (NYSE: CL), and Honeywell Aerospace (NASDAQ: HONA). In the S&P 500, Bloom Energy Corp (NYSE: BE), Illumina Inc (NASDAQ: ILMN), and Everpure Inc (NYSE: P) will be added. For the S&P MidCap 400, HubSpot Inc (NYSE: HUBS), AGNC Investment Corp (NASDAQ: AGNC), Corcept Therapeutics Inc (NASDAQ: CORT), and Brinker International Inc (NYSE: EAT) will become new constituents.

Tesla Falls Nearly 6% as Cybercab Update Misses Expectations

Tesla (NASDAQ: TSLA) shares fell nearly 6% on Friday after the company's highly anticipated Cybercab robotaxi update failed to meet Wall Street expectations, raising concerns about its ability to compete with Waymo in the U.S. robotaxi market. Tesla hosted a Cybercab event in Austin, Texas on Thursday that was invitation-only, with no livestream and no appearance by CEO Elon Musk. The company said users can access the Cybercab driverless service through the Tesla Robotaxi app within a limited area of Austin. Analysts at RBC Capital Markets said the event disclosed limited new information, leaving key questions on pricing, production timelines, and regulatory approvals unresolved. Wells Fargo analysts also called the "Cybercab launch event disappointing," noting early operational issues with Tesla's Austin robotaxi service. Additionally, the National Highway Traffic Safety Administration has initiated a "review inquiry" to confirm whether the Cybercab meets federal safety standards and completes required safety certifications. Prior to the event, Tesla shares had risen 5.4% the day before.

Anthropic Prepares for IPO With Morgan Stanley, Goldman Sachs in Key Roles

According to reports, AI company Anthropic is close to finalizing key roles for Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc (NYSE: GS) in its initial public offering, with plans to file paperwork as early as next week. Sources say Morgan Stanley is in the lead "left lead" position for the underwriting, overseeing IPO strategy, while Goldman Sachs is expected to serve as the stabilization agent, managing trading stability in the early post-listing period. JPMorgan Chase & Co (NYSE: JPM), Citigroup Inc (NYSE: C), and Barclays PLC (NYSE: BCS) are also expected to play significant roles in the deal. Anthropic is expected to list in New York in late September or early October, with the IPO serving as a test of investor appetite for fast-growing AI companies.