Multiple Headwinds Hit Markets: U.S. Stocks, Dollar, and Treasury Yields Tumble

Market Overview

On Friday, a weaker-than-expected U.S. Nonfarm Payrolls report shattered the markets perception of a resilient labor market, making a September rate cut almost a foregone conclusion. At the same time, new tariff measures and heightened geopolitical tensions boosted safe-haven demand. U.S. equities came under pressure, with the Nasdaq falling more than 2% and the S&P 500 posting its steepest decline since May. Rate cut expectations drove the 2-year Treasury yield down more than 28 basis points, while the U.S. Dollar Index slid over 1.3%. In early Asian trading on Monday, sentiment remained cautious—U.S. equity futures saw limited movement, spot gold edged higher, and WTI crude opened lower.

Hot Topics to Watch

OPEC+ to Ramp Up September Output

OPEC+ plans to formally approve a production increase of 548,000 barrels per day during a virtual meeting on Sunday. This move completes the full rollback of the previously suspended 2.2 million bpd production cuts. Another cut of 1.66 million bpd remains in place and is scheduled to run through the end of 2026, which will remain a key focus for the market going forward.

Nonfarm Payrolls Freeze Up

On Friday, data from the U.S. Bureau of Labor Statistics showed July Nonfarm Payrolls rose by just 73,000—marking a nine-month low and sharply missing expectations of 104,000. The U.S. labor market is no longer in “moderate slowdown” mode but rather “slamming on the brakes,” raising concerns of a potential new recession. Following the data, traders fully priced in the likelihood of a Fed rate cut in October.

Key Focus (GMT+8)

16:30 — Eurozone August Sentix Investor Confidence Index