US equity indices slip on tech and inflation concerns ahead of the non-farm payroll report

Tech-led downturn stalls US stock markets

United States (US) stock markets closed lower on Friday, primarily led by technology stocks. Despite solid earnings, these weren't remarkable enough to drive the US Tech 100 (Nasdaq) higher over the past fortnight.

Investors continue to monitor President Trump's reshaping of the Federal Open Market Committee (FOMC) Board, sparking concerns over the Federal Reserve's (Fed) independence.

Inflation concerns and trade uncertainty

On Friday night, the Fed’s preferred measure of inflation, the core personal consumption expenditures (PCE) price index, rose by 0.3% month-over-month (MoM), pushing the annual rate to 2.9%. This marks an increase from its 2.6% low in April and is significantly above the Fed’s 2% target. This rise comes amid President Trump’s ongoing reshaping of the Fed Board, including his attempt to remove Fed Governor Lisa Cook last week and the nomination of Stephen Miran to replace Adriana Kugler.

After US markets closed on Friday, ahead of the long Labour Day weekend, the US Court of Appeals ruled that the emergency authorities invoked by President Trump do not permit tariffs. However, all current tariffs will remain as the case likely proceeds to the US Supreme Court, perpetuating trade uncertainty over the US economy.

Upcoming economic data

The key data point this week is Friday’s non-farm payrolls (NFP) report. Prior to that, traders will receive the August Institute for Supply Management (ISM) manufacturing purchasing managers' index (PMI), Job Openings and Labor Turnover Survey (JOLTS) job openings, the Automatic Data Processing (ADP) employment report, and the ISM services PMI.

Non-farm payrolls

Date: Friday, 5 September at 10.30pm AEST

In July, the US economy added only 73,000 jobs, below the expected 105,000, with the unemployment rate ticking up to 4.2% from 4.1%. The participation rate declined to 62.2%. There was a significant downward revision to the job numbers for the previous two months, reducing total jobs by 258,000 and dropping the three-month average payroll gain from 150,000 to 35,000.

The upcoming 5 September payroll report and the Bureau of Labor Statistics (BLS) labour market revisions due on 9 September are under intense scrutiny. The July labour market update and the Fed's pivot at Jackson Hole highlighted labour market slowdown risks as more significant than persistent inflation.

For August, predictions suggest the US economy will add 78,000 jobs, with the unemployment rate rising to 4.3% from 4.2%. If numbers align with expectations, the Fed is likely to cut interest rates by 25 basis points (bp) in September – a move to which the US interest rate market currently assigns an 88% probability.

US unemployment rate chart

Nasdaq 100 technical analysis

The rally in the Nasdaq 100 has stalled against weekly trend channel resistance near 24,000, as anticipated. Currently, the reaction from this resistance is limited, leaving uncertainty over a deeper pullback or new highs.

If the Nasdaq 100 remains below weekly trend channel resistance, there is potential for a deeper correction towards 22,500 initially, with risk to 22,000

Nasdaq 100 weekly chart

A potential head and shoulders topping pattern appears on the daily chart, with the neckline around 23,100.

Nasdaq 100 daily chart

S&P 500 technical analysis

The US 500 (S&P 500) reached a record high of 6508 last week before ending unchanged, forming a 'loss of momentum' weekly candle. With weekly trend channel resistance at 6550 and bearish relative strength index (RSI) divergence, there is a risk of a pullback towards 6350 before 6200.

S&P 500 daily chart

• _{Source: TradingView. The figures stated are as of 1 September 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}