September starts weak: ISM in contraction, Europe under pressure, US tariffs suspended until October
Markets amid macro uncertainties and seasonality
September starts weak: ISM in contraction, Europe under pressure, US tariffs suspended until October
Reopening of US markets
The US market was closed for Labor Day on September 1 and reopened today, Tuesday, September 2. At today’s close, the US500 (S&P 500) index showed a very slight decline of 0.02% to 6,459 points.
Climate in European markets
European markets opened uncertainly, with government bond yields rising: in Germany, the 30-year Bund reached its highest level in 14 years, while in France, the 30-year OAT hit a 16-year high, driven by debt concerns and political instability. Fiscal concerns – especially in France – are fueling greater volatility.
US ISM Manufacturing PMI (August)
The official ISM Manufacturing PMI for the United States came in at 48.0 in August, unchanged from July. Readings below 50 indicate contraction, confirming the weakness of the US manufacturing sector.
In parallel, the S&P Global US Manufacturing PMI (flash) came in at 53.3, thus in expansion territory.
This divergence highlights uncertainty about the real industrial trend: while the ISM reflects a broader sample of large companies, the S&P Global index focuses more on SMEs and may provide earlier signals.
New ISM updates are due today: markets could react sensitively to the data, shaping expectations for monetary policy and growth.
Trump tariffs: legal context
A federal appeals court has ruled that most of Trump’s tariffs – imposed under the International Emergency Economic Powers Act (IEEPA) – are illegal, but they will remain in place until October 14 to allow an appeal to the Supreme Court. This creates regulatory uncertainty, with potential impacts on trade policy and corporate costs.
Prospects for September
According to the Stock Trader’s Almanac, September is historically the worst month for the S&P 500: in the past 35 years, it has closed lower on 18 occasions, with an average decline of 0.8%. Added to this are US political tensions, fiscal instability in France, uncertainties over tariff policies, and the labor market under scrutiny.
Outlook for September
Portfolio management suggestions
|
Asset |
Possible strategy |
Reason |
|
Equities |
Maintain selective exposure, favoring defensive and quality sectors (utilities, healthcare, gold). Use low-cost sector ETFs. |
Pending clearer economic data, moderate exposure can limit losses in case of a general downturn. |
|
Bonds |
Reintroduce short-to-medium duration (2–5 years), with high-quality bonds. Consider a small portion in inflation-linked or high-grade corporate bonds. |
Rising yields create tactical opportunities; shorter duration limits rate risk. |
|
Commodities |
Gold and silver as safe-haven assets: maintain or slightly increase exposure. Monitor energy (oil) only if geopolitics justify it. |
Low real yields and heightened global risks support safe-haven assets. |
|
Cash |
Keep a tactical reserve (5–10%) ready for deployment in market pullbacks. |
Provides “dry powder” to buy at a discount during downturns. |
Suggested allocation (not personalized advice, just our view):
The information in this post is for informational purposes only and does not constitute personalized financial advice. Every investment decision should be evaluated according to one’s own risk profile and, if necessary, with the support of a qualified advisor.
In summary
September opens with many unknowns: weak markets after the holidays, European fiscal pressure, the legality of US tariffs under discussion, and economic signals moderately better but still fragile. A prudent, balanced, and flexible strategy seems the most sensible.
Keep an eye on the upcoming non-farm payrolls, the non-manufacturing PMI data, and progress in the legal appeals on tariffs: they could determine the market direction over the next 4–6 weeks.
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