Wall Street enters September with focus on employment data, AI spending, and Tesla

Wall Street kicks off September with a busy economic data calendar, tech earnings reports, and a Tesla event. The markets' biggest catalyst will be the August employment report, to be released on Friday.

Employment Report and Expectations

In August, the US economy is expected to add 58,000 jobs, the unemployment rate is projected to remain at 4.1%, and average hourly earnings are expected to increase by 0.3% on a monthly basis.

Estimates vary among major banks. While Deutsche Bank and UBS project payroll growth at 65,000, Wells Fargo estimates this figure will be 80,000.

Federal Reserve and Market Impacts

Following the surprising job loss of 23,000 in July, this upcoming report carries critical importance in the wake of Federal Reserve Chair Kevin Warsh's remarks at Jackson Hole.

Strong employment and wage growth data could reinforce expectations for a tighter Fed policy, push bond yields higher, and create pressure on stock valuations.

Other Economic Data of the Week

Ahead of Friday's major report, investors will monitor the JOLTS data and the manufacturing ISM report on Tuesday.

On Wednesday, ADP private-sector employment data will be released, while ISM services data will guide the markets on Thursday.

Artificial Intelligence Spending

Earnings reports from technology companies such as Dell Technologies, Broadcom, Snowflake, and Hewlett Packard Enterprise will show the trajectory of AI infrastructure spending.

Swissquote senior analyst Ipek Ozkardeskaya noted that while there is no doubt about AI demand, the cost for big tech companies to finance these massive expenditures is making investors think.

Leadership Change at Apple

On the Apple front, an important management change will take place on Tuesday, with John Ternus taking over the CEO seat from Tim Cook.

During this transition process, investors will closely follow clues regarding the company's product strategy and artificial intelligence goals.