• Wall Street slid in early trading on September 3, as the DJIA, S&P 500, and Nasdaq declined by -1.51%, -2.12%, and -3.26% respectively.
• Stocks tumbled on Tuesday, driven by a sharp drop in chip stocks and a 3% fall in crude oil prices to an 8-month low, which weighed on energy stocks. The broader market was further weighed down by weaker-than-expected ISM manufacturing and construction spending reports.
• The 10-yr UST yield dipped by -7.0 bps to 3.84%, while the 2-yr yield fell by -3.0 bps to 3.84%. Tuesday's sharp stock selloff triggered safe-haven buying of T-notes, but supply pressures persist with up to USD55 billion in corporate debt expected this week, prompting bond dealers to short T-notes as a hedge.
• The ISM Manufacturing PMI rose slightly to 47.2 in August 2024 from 46.8 in the previous month, still below market expectations of 47.5.
• US construction spending dropped by -0.3% MoM to a seasonally adjusted annual rate of USD2,162 billion in July 2024, after an upwardly revised flat reading, falling short of market expectations.
• Meanwhile in Asia, the au Jibun Bank Japan Services PMI was revised down to 53.7 in August 2024 from the preliminary estimate of 54.0, marking the seventh expansion in the service sector this year.
• Global bond yields moved higher on Tuesday: the 10-yr German bund yield declined -6.1 bps to 2.27%, the 10-yr UK gilt yield fell by -6.5 bps to 3.99%, and the 10-yr Japanese JGB rose by +1.3 bps to 0.93%.
