Wall Street trading desks won’t get back to normal levels of activity until after this holiday-shortened week and the start of the NFL season, but the first session of what is historically the worst month of the year for the stock market unfolded in regular form Tuesday.
With Nvidia (NVDA) earnings out of the way and three trading sessions until Jobs Friday, investors, traders and speculators weighed a set of less-than-stellar incoming data.
As LPL Financial Chief Technical Strategist Adam Turnquist writes, “Over the last 75 years, the S&P 500 has posted an average return of -0.7% in September, making it the worst-performing month for stocks.”
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The index has posted positive monthly returns 44% of the time in September, the lowest “positivity rate” of any month.
Eight of the 11 official stock market sectors closed in the red Tuesday, with real estate and industrial stocks leading the way down. Tech stocks were also a major drag on the indexes.
“Seasonal trends should always be viewed with some degree of caution,” Turnquist observes, “as they reflect the broader market climate rather than the current market conditions.”
Energy stocks were the best-performing group, and health care and consumer staples also eked out gains.
There is nothing as big as a quarterly report from the leader of the AI revolution on the earnings calendar this week, though another chipmaker and multiple other important companies will post their results.
The main event is on the economic calendar: The Bureau of Labor Statistics will release the August jobs report before the opening bell on Friday.
In the interim, the Institute for Supply Management Manufacturing Purchasing Managers Index rose 0.7 point to 48.7, remaining in contraction territory for a sixth straight month, while the S&P Global U.S. Manufacturing PMI added 3.2 points to 53.0.
“August’s manufacturing PMIs send mixed messages,” says Barclays Senior U.S. Economist Jonathan Millar, “with notable divergence between the competing ISM and S&P Global measures … We take more signal from the ISM, which is more proven and remains in a range consistent with lackluster activity.”
And the Census Bureau said total construction spending was down by 0.1% in July vs a FactSet-compiled consensus expectation for an increase of 0.35%. Construction spending was down 2.8% year over year.
By the closing bell, the broad-based S&P 500 had declined 0.7% to 6,415, the blue chip Dow Jones Industrial Average was off 0.6% at 45,295, and the tech-heavy Nasdaq Composite had shed 0.8% to 21,279.
Trump’s trade tactics weigh on tech stocks
Taiwan Semiconductor Manufacturing (TSM) recovered from its lows for the day but the semiconductor stock closed down 1.1% after it announced the Trump administration has revoked its “fast-track” license to ship chip supplies to China.
TSMC’s Validated End User (VEU) privileged exporter status will end on December 31. Thereafter, shipments of U.S.-made chip tools and inputs to the company’s facility in Nanjing will require U.S. export licenses.
TSM was down as much as 7.7% in pre-market trading. Fellow chipmaker Broadcom (AVGO), which will report earnings after Thursday’s close, was down as much as 3.5% but rallied to finish with a gain of 0.3%.
Nvidia, down 1.9%, was among the worst-performing Dow Jones stocks Tuesday and has now shed 6.0% since its fiscal 2026 second-quarter earnings event.
Salesforce (CRM), which will report earnings after Wednesday’s close, joined NVDA stock near the bottom of the Dow with a loss of 1.3%.
Uncle Warren is disappointed in KHC
Kraft Heinz (KHC) may not be long for Warren Buffett and the Berkshire Hathaway equity portfolio after the packaged foods giant said it will split into two separate publicly traded companies. It’s basically a de-merger unwinding of the 2015 deal between Kraft and Heinz engineered by the Oracle of Omaha.
KHC stock closed down 7.0% at $26.02, off its lows for the session but just above the $25.44 52-week bottom it reached in late June.
Buffett told CNBC that although the merger hasn’t worked out as planned, his successor as CEO of Berkshire Hathaway (BRK.B), Greg Abel, expressed disappointment to Kraft Heinz. Berkshire owns a 27.5% stake in KHC and remains its largest shareholder.
According to Kraft Heinz, an entity now known as Global Taste Elevation but to be named later will include brands such as Heinz, Philadelphia and Kraft Mac & Cheese, which combined for $15.4 billion in 2024 sales.
North American Grocery, also to be named later, will include Oscar Mayer, Kraft Singles and Lunchables, among others, with combined annual sales of $10.4 billion.
As CFRA Research analyst Arun Sundaram notes, “The separation is expected to drive greater attention and focus into each area of the business, ultimately unlocking shareholder value.”
Sundaram says North American Grocery has “greater long-term margin expansion opportunities,” though Global Taste Elevation “is positioned for stronger top-line growth in emerging markets and food-away-from-home channels.”
Kraft Heinz expects to complete its separation into two companies in the second half of 2026.
So what happens when Buffett and Berkshire decide to sell KHC?