Highlights:

– Wall Street closed lower on September 1 as technology stocks weighed on benchmarks.
– European indices posted modest gains, with the DAX and Euro Stoxx 50 advancing.
– Tel Aviv indices retreated, led by declines in TA-35 and TA-125 amid heavy trading volumes.

Global markets began the first week of September 2025 on a cautious note, with U.S. equities slipping, European stocks holding modest gains, and Asian markets closing mixed. Investors digested a combination of soft U.S. data, currency movements, and regional risk factors, while Israeli markets mirrored global weakness with notable declines across leading benchmarks.

U.S. Markets Struggle Under Tech-Sector Pressure

On September 1, U.S. equities ended the session broadly lower. The Nasdaq Composite fell 1.15% to 21,455.55, leading declines among major indices, as high-valuation technology shares faced renewed selling pressure. The S&P 500 dropped 0.64% to 6,460.26, while the Dow Jones Industrial Average eased 0.20% to 45,544.88.

Small-cap stocks also retreated, with the Russell 2000 slipping 0.50% to 2,366.42. Meanwhile, volatility edged higher as the VIX rose nearly 5% to 16.12, signaling rising investor caution. The U.S. Dollar Index held steady at 97.77, suggesting currency markets are in a wait-and-see mode ahead of upcoming Federal Reserve commentary.

Analysts pointed to ongoing debates about the Fed’s rate-cut trajectory and concerns over corporate earnings growth as key factors behind the equity weakness.

European Stocks Hold Ground

In contrast to Wall Street’s declines, European equities managed to end the session with slight gains. The DAX rose 0.57% to 24,037.33, while the Euro Stoxx 50 advanced 0.29% to 5,367.08. London’s FTSE 100 edged up 0.10% to 9,196.34, supported by energy and financials, and France’s CAC 40 inched higher by 0.05% to 7,707.90.

Currency moves were muted, with the Euro Index up 0.04% to 116.83 and the British Pound Index slipping 0.10% to 134.98. However, the MSCI Europe dipped slightly by 0.04% to 2,456.47, reflecting divergences between regional markets.

The modest European gains came despite global growth concerns, with investors emphasizing sector rotation into defensive names and exporters benefiting from stable currency dynamics.

Asia Mixed as Regional Indices Diverge

Asian equities closed with mixed results on September 1. The KOSPI surged 0.80% to 3,167.99, and the Nikkei 225 climbed 0.48% to 42,390.51, supported by resilient corporate earnings in South Korea and Japan. India’s SENSEX gained 0.24% to 80,555.43, while Australia’s S&P/ASX 200 dipped 0.21% to 8,909.00.

Hong Kong’s Hang Seng dropped 0.59% to 25,465.62, pressured by property sector weakness, and China’s Shanghai Composite fell 0.79% to 3,844.84, reflecting persistent investor caution around domestic growth.

Currency indices in Asia moved narrowly, with the Australian Dollar Index up 0.18% to 65.39 and the Japanese Yen Index slipping 0.11% to 68.00.

Tel Aviv Indices Decline in Line with Global Sentiment

Israeli markets mirrored the global cautious tone on September 1, closing firmly lower across major benchmarks. The TA-35 fell 0.53% to 3,038.65, while the TA-90 declined 0.55% to 3,313.40. Broader weakness was evident in the TA-125, which dropped 0.54% to 3,098.33.

Banking and value-oriented shares came under pressure, with the TA-90 and Banks index losing 0.74% to 3,459.95. Trading activity remained robust, with total turnover across the exchange exceeding NIS 1.4 billion.

Bond markets also reflected cautious sentiment. The All-Bond index slipped 0.12% to 411.12, while the Tel-Bond 60 CPI-Linked fell 0.15% to 405.67. Short-term instruments held steady, with the Short-Term Bond Index up slightly by 0.02% to 458.97.

Outlook for September 2, 2025

Looking ahead, markets on September 2 will be guided by incoming U.S. labor market data, Eurozone inflation figures, and regional earnings updates. Investor focus remains firmly on the Federal Reserve’s policy stance, with speculation mounting over the timing and scale of potential rate cuts.

In Israel, local investors will closely monitor global equity trends and commodity price movements for cues, especially as the shekel has remained relatively stable against the dollar. Global risk appetite, energy prices, and bond market signals will shape sentiment heading into today’s trading session.

While September opened with volatility and uneven performance across regions, market participants remain attentive to macroeconomic signals that could dictate momentum through the rest of the week.