Weekly Market Update for September 4, 2026

by Gavyn Jensen-Schneider, Research Associate

A relatively uneventful week saw little movement in the major indices. The S&P 500 finished the week up +0.09%, while the Nasdaq rose +0.40%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.78%, up +5 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, closed at 4.01%, up +3 bps from last week.

Friday’s employment report was anticipated all week, with analysts and commentators speculating how the new labor statistics would factor into the Fed’s next interest rate policy meeting. Nonfarm payrolls for August came in much stronger than expected at +162k, beating Wall Street’s +65k estimate. Trends are generally more useful for policymakers than a singular month’s numbers as they give a better idea of the direction the economy is headed. In the past three months, nonfarm payrolls have averaged +71k new jobs, implying some measure of stability.

Relative stability within the labor market magnifies focus on inflation, especially as it has been above the 2% target for over five years now. Among Fed policymakers, perspectives seem divergent, setting the stage for a contested debate in the Fed’s September meeting. Fed Governor Barr said on Tuesday that the Fed should be prepared to hike policy rates unless upcoming data shows progress toward the inflation target whilst Fed Governor Waller, who spoke Thursday, seemed inclined to hold interest rates at the upcoming September meeting, so long as current disinflationary trends hold. The pressure is on, with next week’s CPI inflation reading seen as the catalyst in the hike-or-hold debate at the Fed.

Tensions continue to rise with Iran, as military strikes resumed this week. The US military has been working double duty, escorting ships through the Strait of Hormuz while striking nearly 60 Iranian military targets like air defenses, radar systems, and mine-laying equipment. The two-pronged military and economic fight is putting major pressure on Iran: the Iranian rial’s exchange rate has collapsed, inflation sits at nearly 70% year over year, the country has only a two-month supply of gasoline remaining, and outbound crude oil shipments have dropped to 260,000 barrels per day (bpd) from 1.7 million bpd a year ago. The conflict may drag on for some time yet, but Iran is certainly feeling the pressure.

Pressure on the Fed intensified this week, as President Trump renewed his call for lower interest rates. As the President routinely highlights, higher interest rates make it more expensive for the US government to service its debt, increasing the budget deficit and weighing on economic growth. However, higher interest rates are the Fed’s best weapon against inflation, which has been persistent throughout 2026. The ongoing public discourse surrounding the Fed exemplifies the difficult mission of Fed policymakers, who sometimes have to make decisions that are unpopular with the politicians and the public. Chairman Warsh, still nascent in his tenure, will have many tough decisions to make, and it remains to be seen if he’ll emulate the independence of Chairman Paul Volcker, or cave to external pressure like Chairman Arthur Burns.

The shortened Labor Day week has little in the way of earnings reports. Instead, the corporate calendar resumes with a slate of brokerage conferences, including Goldman Sachs’ Communacopia + Technology Conference. Economic data will be focused almost exclusively on Friday’s core and headline Consumer Price Index (CPI) readings for August, though the August Producer Price Index (PPI) and September University of Michigan Consumer Sentiment index are also on the docket.

In addition, financial markets, and our office, will be closed in observance of Labor Day on Monday, September 7. From all of us here at Ulland, we wish you a happy, safe, and hopefully not too humid holiday weekend!