Stocks Slip as September Opens Under Pressure

The first trading session of September brought a dose of reality to investors, with the S&P 500 (-0.7%), Nasdaq Composite (-0.8%), and Dow Jones Industrial Average (-0.6%) all closing lower. Elevated valuations, seasonal headwinds, and a U.S. Court of Appeals ruling that deemed most of President Trump’s tariffs illegal combined to sour sentiment.

Although the ruling leaves existing tariffs in place until October 14 pending a potential Supreme Court review, it injected a fresh dose of uncertainty into an already fragile market mood. President Trump is reportedly seeking an expedited ruling from the Supreme Court.

Selling pressure was widespread, with all eleven S&P 500 sectors spending time in negative territory before a modest late-session rebound helped trim losses. Real estate (-1.7%), industrials (-1.1%), information technology (-1.0%), consumer discretionary (-1.0%), and financials (-0.7%) were the hardest hit, underscoring a broad risk-off tone.

Mega-cap stocks were again at the center of the action. Early weakness in the group dragged the market lower, but some late “buy-the-dip” enthusiasm allowed them to recover part of the day’s losses. NVIDIA (NVDA 170.74, -3.44, -1.97%) had a volatile session, falling more than 3% at its lows before closing just under its 50-day moving average. The PHLX Semiconductor Index (-1.1%) also recovered from steeper declines but still ended with a notable loss.

Defensive areas showed some resilience. Health care (+0.1%) and consumer staples (+0.1%) eked out small gains, buoyed by strength in biotech names that sent the iShares Biotechnology ETF up 1.6%. The energy sector (+0.2%) led all groups, supported by a 2.5% rally in crude oil, which closed at $65.60 per barrel.

Not all defensive stocks were spared, however. Kraft Heinz (KHC 26.02, -6.97%) dropped sharply after announcing plans to split into two publicly traded entities, while Constellation Brands (STZ 151.26, -6.60%) slumped after cutting its FY26 guidance.

Market breadth was firmly negative for most of the day, with decliners outpacing advancers by more than 2-to-1 on both the NYSE and Nasdaq, though late buying helped equities close above their session lows. Volatility picked up, with the CBOE Volatility Index spiking 14% to 17.51, reflecting heightened investor unease as September began on a weak note.

With no major economic data or earnings on the docket for tomorrow, the market will be left to determine whether today’s selling marks the start of a deeper pullback or just another setup for a rebound rally.

Our FTInvest 11 model portfolio spent most of the session trading in a tight range, with no clear directional momentum emerging throughout the day. After a cautious start, the index moved into positive territory but never gained significant traction. By the close, FTInvest 11 was virtually unchanged, raising just fractionally to finish at 843.22 — essentially flat on the day.