Wall Street started off September on a sharply lower note on Tuesday (September 2) as investors weighed the legality of President Donald Trump's tariffs after a federal appeals court ruled most of his sweeping tariffs illegal.
00:00Wall Street started off September on a sharply lower note on Tuesday, September 2nd, as investors waived the legality of President Donald Trump's tariffs after a federal appeals court ruled most of his sweeping tariffs illegal.
00:14The S&P 500 lost 44.72 points or 0.69% to end at 6,415.54 points, while the Nasdaq Composite lost 175.92 points or 0.82% to 20,279.63.
00:31The Dow Jones Industrial Average fell 249.07 points or 0.55% to 45,295.81.
00:41The markets are starting September with a continued decline from Friday's small sell-off after a really good month in August.
00:50We got some news that courts have said that the tariffs of the Trump administration may not be legal or from their perspective are not legal.
01:02And so now something that we thought was kind of settled isn't maybe as settled as we had expected.
01:08And thereby, we're getting a little bit of market turmoil.
01:13Earnings are kind of behind us at this point.
01:16Last week was big earnings, kind of the final large earnings week.
01:21And we're heading into September with a much-awaited or much-anticipated, I should say, jobs record on Friday.
01:29So some concern over how far this tariff thing really has run through and a new data point ahead of a Federal Reserve meeting in a few weeks.
01:40And we got some weakness in the markets.
01:41With the tariff uncertainty kind of creeping back up to a level that we haven't seen since they were first announced back in April, unsurprisingly, you're getting the long bond breaking out to the upside.
01:56So the 30-year bond is back up near around 5%.
01:59Expectations of longer-term inflation, not necessarily attached to tariffs, but higher borrowing costs if there's a revenue source that's going away.
02:11And so you're getting a steepening effect of the yield curve right now.
02:17Investors don't want to own longer-dated stuff where there's greater uncertainty, and so they're sticking to the shorter term.
02:24And there's probably going to be a little bit of buying there, pushing yields down anyway, because we're expecting a rate cut at the end of the month.
02:35So there's probably some front-loading happening there.
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