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Just like in early August, September has brought a pinch and punch for investors during the first days of the month.

As noted by Deutsche Bank’s macro strategy team, the S&P 500 posted its worst daily performance (-2.1%) on Tuesday since the volatility on 5 August and included the largest market cap drop in history for a single stock, as Nvidia (-9.5%) lost an eye-watering $279bn.

Sparking the selloff, ISM manufacturing data from the US came in below expectations — 47.2 in August (vs. 47.5 expected), which was only a modest pickup from the disappointing July reading.

Economic weakness raises the possibility of a 50bps cut at the Federal Reserve’s next meeting (17 September) — but it’s not a done deal.

Investors are currently pricing in about 35bps of easing, suggesting they are uncertain as to whether two cuts will be necessary.

We expect today’s release of US non-farm payrolls to provide more clarity.

In contrast, this week was full of European LevFin conferences — Goldman Sachs on 3 September and JP Morgan on 4-6 September — where sentiment was more optimistic.