September Dow Forecast: Labor Data Could Decide If Dow Jones Breaks Record Levels
U.S. markets ended last week with a mixed tone — tech-heavy indices stumbled on Nvidia’s decline, while the Dow Jones proved resilient...
Quick overview
- U.S. markets ended last week with mixed results, as tech-heavy indices struggled due to Nvidia's decline, while the Dow Jones approached record highs.
- Nvidia's drop was triggered by news of Alibaba's new AI chip, highlighting the intensifying U.S.–China AI rivalry and impacting investor confidence in the tech sector.
- Despite the tech sector's challenges, the Dow Jones showed resilience with strong dip-buying, indicating investor confidence and potential for new highs.
- Looking ahead, attention will focus on the Federal Reserve's policy decisions and upcoming U.S. labor market data, which could influence market volatility.
Live DOW Chart
U.S. markets ended last week with a mixed tone — tech-heavy indices stumbled on Nvidia’s decline, while the Dow Jones proved resilient, closing near record highs.
Nvidia Drives Tech Pressure
The sharpest pressure late last week came from Nvidia (NVDA), which dropped more than 3% after a Wall Street Journal report revealed that Alibaba had developed a new AI chip aimed at countering U.S. chip restrictions on China.
The news sparked broad selling across the tech sector, shaking investor confidence and highlighting the growing intensity of the U.S.–China AI rivalry. Nvidia’s decline underscored the company’s heavy reliance on Chinese demand and the risks stemming from escalating technological competition.
The S&P 500 finished lower, while the Nasdaq Composite logged the steepest losses of the session, reflecting the tech sector’s vulnerability.
Dow Jones Resilience: Dip-Buying Signals Confidence
Despite the tech-led drag, the Dow Jones Industrial Average displayed remarkable resilience. Dips earlier in the week — and even Friday’s afternoon pullback — were quickly bought, sending the index back near record highs.
This consistent dip-buying pattern points to strong investor confidence, with markets signaling that the Dow could break to new highs in the coming week.
The divergence is clear: growth-heavy indices like the Nasdaq and S&P 500 remain under pressure, while the diversified, value-oriented Dow continues to outperform.
Inflation Data and Fed Expectations
Friday also brought a rise in the U.S. Personal Consumption Expenditures (PCE) Price Index, climbing to 2.8%. Although inflationary pressures remain largely supply-driven, markets continue to bet that the Federal Reserve will deliver a rate cut in September.
For now, the data did little to change sentiment — markets remain more focused on the outlook for Q4 growth and Fed policy signals than on backward-looking indicators.
Dow Jones: Resilience at Record Levels
Weekly Performance Snapshot
- Dow Jones Industrial Average: −60.37 points (−0.13%)
- S&P 500 Index: +2.59 points (+0.04%)
- Nasdaq Composite: −10.11 points (−0.05%)
- Canada S&P/TSX Composite Index: +250.80 points (+0.89%)
While the U.S. posted mostly muted weekly results, Canada’s TSX outperformed, supported by strength in energy and materials sectors.
Looking Ahead
With U.S. markets closed Monday for Labor Day, attention shifts to the Federal Reserve’s next policy cues and upcoming U.S. labor market data. These catalysts, combined with month-end positioning, could either trigger further short-term volatility or provide the backdrop for a rebound. We have the JOLTS job openings report, followed by the ADP Non-Farm Employment Change and te Unemployment Claims with the big release being the NFP on Friday which will show a clearer picture of the US labour market. Expectations are low, so we might get a positive surprise.
Conclusion: The week highlighted a growing divide on Wall Street: tech-driven indices are under pressure from AI competition and inflation concerns, while the Dow Jones continues to attract buyers and edge closer to record highs. The next test will come from September’s Fed decision and U.S. jobs data, which may set the tone for whether resilience or renewed volatility dominates heading into Q4.
Dow Jones Live Chart
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