Highlights:

– U.S. equities fell across major indices, with the Nasdaq leading losses at -0.82%.
– European markets posted deeper declines, led by Germany’s DAX down 2.29%.
– Tel Aviv benchmarks closed broadly lower, with the TA-35 falling 1.36%.

Global markets closed September 2, 2025 on a cautious note, with losses across U.S., European, and Israeli indices highlighting investor unease about slowing growth momentum, central bank policy paths, and sector-specific headwinds. While Asia offered mixed results with South Korea’s KOSPI in positive territory, most regional benchmarks mirrored the global risk-off sentiment. As investors look toward September 3, the focus will remain on monetary signals, macroeconomic data, and regional market resilience.

U.S. Markets Struggle Under Mixed Signals

Wall Street ended Tuesday’s session in the red as traders weighed weaker-than-expected corporate earnings against hopes of policy support. The S&P 500 dropped 0.69% to 6,415.54, while the Dow Jones Industrial Average slipped 0.55% to 45,295.81. The Nasdaq Composite saw the steepest decline, falling 0.82% to 21,279.63, as technology shares lost momentum.

Small-cap stocks also struggled, with the Russell 2000 down 0.60% to 2,352.21, suggesting broad-based weakness across U.S. equities. Volatility increased, as reflected by the CBOE VIX index climbing 6.51% to 17.17, underscoring market caution.

The U.S. Dollar Index edged up 0.10% to 98.50, reinforcing its safe-haven role. For September 3, investors are expected to closely monitor upcoming economic indicators, including labor data and service sector PMI releases, which could influence expectations around Federal Reserve policy.

European Equities Lead Global Declines

European indices experienced sharper losses compared to the U.S., weighed down by weak corporate outlooks and energy sector concerns. Germany’s DAX plunged 2.29% to 23,487.33, its steepest daily drop in recent weeks. The pan-European STOXX 50 declined 1.42%, while the MSCI Europe index shed 1.84%.

In France, the CAC 40 fell 0.70% to 7,654.25, and the FTSE 100 in London retreated 0.87% to 9,116.69. Currency markets reflected similar weakness: the Euro Index dropped 0.36% and the British Pound Index slid 0.82%.

Looking ahead to September 3, sentiment will likely hinge on fresh eurozone inflation data and ECB policy commentary. Investors remain concerned about sluggish growth and persistent structural challenges within the region’s industrial base.

Asia Mixed as Regional Divergences Persist

Asian markets on September 2 showed uneven performance. South Korea’s KOSPI gained 0.23% to 3,179.58, while India’s Sensex edged lower by 0.12%. Japan’s Nikkei 225 fell 0.58% to 42,064.97, pressured by a stronger yen, as the Japanese Yen Index dropped 0.85% to 67.42.

China’s Shanghai Composite (000001.SS) fell 0.96% to 3,820.98, while Hong Kong’s Hang Seng slipped 0.47% to 25,377.00, highlighting ongoing pressure from weak property-sector dynamics and muted foreign inflows. In Australia, the ASX 200 tumbled 1.46% to 8,770.70, as the Australian Dollar Index softened 0.37%.

For September 3, Asia’s focus will be on trade data releases and central bank commentary, particularly from Japan and South Korea, where monetary policy expectations remain fluid.

Israeli Markets Face Broad-Based Losses

Tel Aviv equities mirrored global weakness on September 2, with all major indices retreating. The TA-35 closed down 1.36% at 2,997.30, while the broader TA-125 fell 1.54% to 3,050.76. Mid-cap names under the TA-90 index posted even sharper declines, losing 2.03% to 3,246.02.

Trading volumes were heavy, with turnover on the TA-125 reaching nearly 2.5 billion shekels. Out of 125 securities, 107 declined while only 13 advanced, underscoring the broad nature of the selloff. Bond markets also softened modestly, with the All-Bond index slipping 0.16%.

As September 3 trade approaches, investor attention will be on global cues, alongside domestic economic indicators and government fiscal policy updates. Continued global volatility could weigh further on Israeli equities, though resilient consumer and tech segments may provide some offset.

Outlook for September 3, 2025

Markets enter Wednesday’s session under pressure from rising volatility, profit-taking, and global growth concerns. In the U.S., labor market and PMI data will be decisive for near-term sentiment, while European investors await inflation readings for clarity on the ECB’s next moves. Asian markets will track currency fluctuations and central bank commentary, while Israeli investors look to global momentum and domestic macro signals for direction.

While September 2 highlighted broad weakness, September 3 could offer selective opportunities if macro data surprise to the upside. The balance between persistent risks—slowing growth, policy uncertainty, and geopolitical tensions—and resilient consumer demand will continue to shape investor sentiment worldwide.