August payrolls rose just 22,000 with unemployment at 4.3%, pointing to a cooling job market and making a September Fed cut a near lock.

But expanded U.S.–EU tariff frictions and record pessimism in a new WSJ-NORC poll add demand and margin risks. Here’s what to watch and how it could hit portfolios next.

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The Big Picture

Global Trade

No More Blank Checks: U.S. Moves to Reassert Control Over Global Chip Flows

The United States is moving to replace indefinite export waivers with annual approvals for semiconductor shipments to Samsung and SK Hynix factories in China.

The plan, floated by the Commerce Department, would force companies to request permission each year for chipmaking tools and materials instead of relying on open-ended authorizations.

This marks a shift from the “validated end user” system, which granted broad, long-term approvals based on monitoring agreements.

Those waivers are set to expire at year’s end, creating a new flashpoint in the already delicate balance between U.S. policy goals and allied manufacturers operating in China.

A Bureaucratic Checkpoint for Allies

The proposed framework ensures tighter U.S. oversight of technology flows while still allowing Samsung and Hynix to maintain production in China.

For Seoul, the move offers continuity but introduces a layer of uncertainty and compliance costs that complicate long-term planning.

Industry officials see the shift as less disruptive than a blanket ban but more restrictive than the previous system.

For U.S. trade partners, it’s a reminder that Washington will keep a firm grip on chip supply chains, even when allies are caught in the middle.

Solar

America’s Clean Power Momentum Hits a Wall in the Decade Ahead

The U.S. solar sector is bracing for a major slowdown, with forecasts now showing installations could fall nearly a third by 2030.

What was once projected as the nation’s fastest-growing energy source is slipping into uncertainty, raising concerns about grid stability and long-term energy independence.

This sharp downgrade reflects changing incentives and higher project costs, which are weighing heavily on developers, for households and businesses, which translates to delayed projects, pricier clean power, and less certainty about future savings.

Costs Rising, Confidence Falling

Utility-scale solar projects are reporting cost jumps of 4% this year, while commercial systems have seen double-digit increases.

These added expenses are eroding the competitiveness of renewables just as U.S. demand for affordable energy continues to climb.

At the same time, smaller residential systems are being squeezed by higher permitting and financing hurdles.

Instead of accelerating adoption, many families are now second-guessing investments in rooftop solar.

National Impact Beyond Energy

The pullback goes beyond climate goals — it touches jobs, supply chains, and U.S. industrial policy.

Solar and storage accounted for more than 80% of new power capacity in early 2025, meaning any slowdown reshapes the country’s broader growth trajectory.

With states like Texas and Florida leading installations, the trend threatens to undermine progress in regions most dependent on new capacity.

A weaker solar pipeline could leave the U.S. leaning more heavily on older, costlier sources of power.

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Labor Market

U.S. Workers Lose Faith: Job-Switch Confidence Crashes to Record Low

For the first time since the New York Fed began tracking worker sentiment in 2013, confidence in finding a new job has collapsed to its lowest point on record.

Fewer than half of workers now believe they could land another job if they lost their current one, signaling a stark shift in America’s labor dynamics.

This marks the end of the post-pandemic labor boom, when millions were quitting each month with confidence.

Instead, workers are now clinging tightly to current roles as the market cools and opportunities vanish.

From Quits to Cling

The U.S. job market has flipped from worker-driven to employer-cautious in just two years. Voluntary quits, once a sign of strength, have slowed sharply as hiring pipelines dry up.

Employers are not aggressively cutting staff, but they are hesitating to add new ones.

That hesitation leaves workers feeling boxed in, with limited upward mobility and fewer chances to chase better pay.

National Ripple Effect

A stagnant labor market doesn’t just hit job seekers — it ripples through the entire economy.

Fewer new hires mean slower consumer spending growth, dampened wage competition, and a drag on overall confidence.

Expectations for higher unemployment over the next year are also rising, reinforcing fears of a broader slowdown.

The shift from high turnover to job hugging underscores just how fragile the U.S. labor engine has become.

Metrics to Watch

• Labor Market Pulse: August payrolls slowed to +22k, with prior months revised down (June now −13k) and unemployment up to 4.3%.
  
  Watch this week’s claims and any spillover into hiring freezes or guidance cuts in rate-sensitive and export-exposed sectors.
  
  

• Fed Path About How Fast?: Traders now lean toward quarter-point cuts in September, October, and December; the debate is whether cuts are consecutive or more gradual as inflation risks linger.
  
  Rate-sensitive equities benefit from faster cuts; elevated core inflation would argue for a slower path.
  
  

• CPI & Benchmark Revisions: The BLS will release preliminary employment revisions through March 2025, then CPI.
  
  A firm CPI would temper hopes for rapid easing; a softer print could cement back-to-back cuts.
  
  

• Tariff Shock Meter (Ongoing): Section 232 expansions now cover hundreds of metal-heavy finished goods, with inclusion rounds set to broaden coverage this fall.
  
  Track cost pass-throughs and capex delays across machinery, autos, robotics, and utilities.
  
  

• Consumer Sentiment Gap: A WSJ-NORC survey shows optimism at a record low (only 25% see a good chance to improve living standards).
  
  Persistent pessimism can curb discretionary spend and pricing power into Q4 even if headline growth holds.

Market Movers

🪙 The Cut Is Coming, but Pace Is the Trade

August’s +22k payrolls and higher jobless rate essentially lock in a September cut.

The positioning question is whether the Fed follows with consecutive quarter-point moves through year-end.

Faster easing favors duration, quality growth, and housing-adjacent plays; a go-slow approach rewards balance-sheet strength and cash generators as pricing power fades.

💼 Low-Hire, Low-Fire Just Hit Stall Speed

Hiring slowed materially this summer, with June revised to a net loss and total 2025 job adds under 600k so far.

Healthcare and social assistance remained the lone standout, while manufacturing, construction, and professional services shed jobs.

Tilt away from late-cycle cyclicals and toward defensives and services with non-discretionary demand.

🧱 Tariffs Strain the EU Truce with Machinery in the Crosshairs

Expanded U.S. metals tariffs (50% on steel/aluminum content) now hit motors, pumps, tools, and heavy equipment, prompting some EU manufacturers to halt exports and reshuffle supply chains.

Expect higher input costs, longer lead times, and selective production moves; watch automakers and capital-goods names for rebate/quota headlines and guidance risk.

🧾 Pessimism Becomes a Macro Variable

Only one in four Americans thinks hard work will lift living standards; worries about prices, jobs, and housing remain sticky.

That backdrop raises the bar for discretionary spend and reduces tolerance for price hikes—pressure that favors value retailers and trade-down formats, while challenging premium discretionary and brands leaning on promotions.

⚖️ Inflation Still the Wild Card for Pace of Easing

While labor weakness argues for cuts, sticky services prices and tariff pass-throughs could limit the Fed’s speed.

Into CPI, keep barbelled exposure: high-quality growth with durable margins on one end, and cash-rich defensives/dividend growers on the other, while trimming rate-sensitive cyclicals most exposed to EU/U.S. tariff friction.

Market Impacts

Equities: Futures were flat to slightly lower as traders brace for a data-heavy week (PPI Wed, CPI Thu).

Friday’s weak payrolls (+22k, jobless rate 4.3%) firmed expectations for a September cut and even nudged 50 bps into the conversation, but positioning looks cautious with the S&P 500 sitting <1% from record highs.

Tech leadership remains intact after last week’s resilience, yet breadth is fragile as investors watch whether softer labor prints sap earnings momentum into Q3 guides.

Tactically: favor quality mega-cap cash generators; keep some powder dry for CPI volatility.

Bonds: Yields dove after the jobs miss (10-yr ~4.09%, 2-yr ~3.53%, 30-yr ~4.77%) and the curve bull-steepened as markets priced near-certainty of a September cut and a non-trivial tail for 50 bps.

Front-end duration remains the highest beta to incoming inflation; long end could stay sticky if policy-credibility or deficit worries re-emerge.

Playbook: incremental add to 2–5yr on dips; keep hedges on the 30-yr if CPI surprises hot.

Currencies: The dollar weakened broadly post-payrolls (USD/JPY ~147.4, USD/CHF ~0.798, EUR/USD ~1.1717) as markets leaned harder into Fed easing.

Direction near-term hinges on PPI/CPI: a soft combo likely extends the USD drift lower; any upside inflation surprise risks a sharp USD snapback given crowded cut expectations.

Consider trimming USD longs into the prints; look for tactical EUR and CHF strength on downside inflation surprises.

Commodities: Crude stays heavy after OPEC+ approved another output hike from October (a modest +137kbd, but a clear “market-share” signal).

With demand seasonally cooling and supply edging up, rallies likely fade near resistance unless geopolitics flare.

Meanwhile, gold’s haven/rates bid intensified, as spot challenged the $3,600/oz line as weaker jobs boosted cut odds.

For portfolio ballast, maintain partial gold exposure; in energy, prefer downstream and transport over upstream beta near-term.

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Key Indicators to Watch

📅 Consumer Credit (Mon, Sept. 8, 3:00 p.m. ET)
Consensus: $15.0B (prior $7.4B). A re-acceleration implies resilient household borrowing; a soft print would reinforce cooling demand.

📅 NFIB Small-Business Optimism (Tue, Sept. 9, 6:00 a.m. ET)
Consensus: 100.6 (prior 100.3). Watch hiring plans and price-intent sub-indices for confirmation that labor demand and pass-through are both easing.

📅 Producer Price Index, m/m (Wed, Sept. 10, 8:30 a.m. ET)
Consensus: +0.3% (prior +0.9%). A cooler PPI would support a benign CPI setup and keep 25 bps (not 50) as the base case.

📅 Core PPI, y/y (Wed, Sept. 10, 8:30 a.m. ET)
Consensus: — (prior 2.8%). Trend here is key for services-heavy inflation pressure; a downside surprise would validate a slower pipeline to CPI.

📅 Wholesale Inventories (Wed, Sept. 10, 10:00 a.m. ET)
Consensus: +0.2% (prior +0.2%). Inventory build-ups amid softer final demand would raise growth risk and pressure margins into Q3.

Everything Else

• Trump and Japan finalized a trade deal that includes new tariff relief, bolstering support for Prime Minister Ishiba as his party regroups.

• Euro zone inflation held steady at 2.2% in August, keeping pressure on the ECB as growth remains sluggish.

• U.S. job openings fell to levels rarely seen since the pandemic, a fresh signal of cooling labor demand.

• Japan revised Q2 GDP growth higher, with brisk consumer spending offsetting weaker exports and manufacturing headwinds.

• The U.S. unemployment rate climbed to a near four-year high of 4.3% in August, underscoring a labor market hitting stall speed.