Market set to start September in a hole after tariff ruling

Briefing.com Summary:

*Court ruling on tariffs triggers selling interest.

*September is the worst month on record for the stock market.

*The ISM Manufacturing Index for August will be a key economic release today.

The stock market isn’t offering investors a warm greeting on their return from the Labor Day weekend. Equity futures are noticeably lower across the board, with tariff news acting as the catalyst.

Currently, the S&P 500 futures are down 77 points and are trading 1.2% below fair value, the Nasdaq 100 futures are down 366 points and are trading 1.6% below fair value, and the Dow Jones Industrial Average futures are down 455 points and are trading 1.0% below fair value.

This negative disposition follows a U.S. Court of Appeals ruling late Friday that most of the global tariffs announced by President Trump are illegal, since “tariffs are a core Congressional power.” That ruling won’t go into effect until October 14, however, meaning the tariffs are still in force today, as the court is expecting the administration to appeal its ruling to the Supreme Court.

The stock market doesn’t look too thrilled by this news, which introduces a new layer of uncertainty around an already uncertain situation. It isn’t thrilled either by the sight of market rates going up in the wake of the ruling. Remember, the tariff revenue has been advertised as a payment method for the One Big Beautiful Bill Act that keeps the deficit from getting much worse.

The 2-yr note yield is up five basis points to 3.67%, and the 10-yr note yield is up seven basis points to 4.30%. To be fair, the yields on both securities remain well below where they started the year, but sometimes the direction and pace of travel are more important to the market than the level.

In any case, it is another excuse for market participants to do some selling. The other excuse one might hear is the seasonal factor, or “seasonality.” The month of September has been the worst month of the year for the stock market since 1928, with an average decline of nearly 1.2%.

There is no telling at this point what this September will bring, yet the market will be starting in a hole.

Weakness in the mega-cap stocks is doing most of the digging for the equity futures; however, the scope of this morning’s weakness suggests the early selling is going to be broad-based and rooted in a “macro trade.” There isn’t any company-specific news that is driving sentiment.

The macro picture will come into further focus after the opening bell. Today’s economic lineup includes the final S&P Global U.S. Manufacturing PMI reading for August (prior 53.3) at 9:45 a.m. ET, the July Construction Spending Report (Briefing.com consensus: 0.2%; prior -0.4%) at 10:00 a.m. ET, and the August ISM Manufacturing Index (Briefing.com consensus: 48.6%; prior 48.0%) at 10:00 a.m. ET.

—

Originally Posted September 2, 2025 – Market set to start September in a hole after tariff ruling