Australia

Australia's S&P/ASX 200 looks likely to slip at the start of the new month. ASX futures are down by 0.5%, suggesting that the benchmark index, which is on a four-day winning streak and rose by 1.4% in August, may give back some of its recent gains. With earnings season winding down, Ampol, Coles and Iluka are among the stocks that will trade ex-dividend. Energy stocks, which slumped Thursday, could be supported by higher oil prices.

ASX futures were down 0.5% or 38 points as of 8:30am on Friday, suggesting a lower open.

In the US, a late-August rally lost some sizzle Thursday, sapping major stock indexes of momentum as they enter a month that is traditionally their weakest of the year.

Investors still have confidence in the US economy, as well as the potential for artificial intelligence to boost productivity gains, but stock markets fell for much of August before turning upward. The S&P 500 and Nasdaq Composite snapped five-month winning streaks, while the Dow Jones Industrial Average posted its first monthly loss since May.

August's declines were broad, though shallow. They spanned big banks, carmakers and tech giants. Energy stocks were the only slice of the S&P 500 to post monthly gains.

Despite a similarly broad rebound over the previous four trading sessions, major indexes were mixed Thursday. The Dow opened in the green but gave up those gains in the afternoon en route to a 0.5% decline of about 168 points. The S&P 500 dipped 0.2% lower, while the tech-heavy Nasdaq Composite climbed 0.1%.

In commodity markets, Brent crude oil rose 1.2% to US$86.86 a barrel while gold was slightly down at US$1,940.05.

In local bond markets, the yield on Australian 2 Year government bonds slightly down at 3.79% while the 10 Year yield also dipped slightly to 4.02%. US Treasury notes were higher, with the 2 Year yield mostly unchanged at 4.86% and the 10 Year yield unchanged at 4.11%.

The Australian dollar was relatively flat at 64.82 US cents from its previous close of 64.81. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged down to 98.15.

Asia

Chinese shares closed lower amid fresh signs of weakness in the world's second-largest economy. China's August manufacturing PMI edged up but remained in contraction for a fifth straight month, National Bureau of Statistics said Thursday. "External headwinds look set to persist for a while longer, while troubles in the property sector will remain a drag on sentiment among the homebuyers and firms for some time," Sheana Yue, China Economist at Capital Economics said in a research note. Real estate stocks led the losses, with Poly Developments & Holdings Group declining 5.2% and China Vanke dropping 3.9%. The benchmark Shanghai Composite Index declined 0.55% at 3119.88, ending the month 5.2% lower. The Shenzhen Composite Index fell 0.6% and the tech-heavy ChiNext Price Index slipped 0.7%.

Hong Kong shares ended lower as new signs of weakness in the Chinese economy damped investor sentiment. The Hang Seng Index fell 0.55% to 18382.06. China's manufacturing PMI edged higher in August but remained in contraction territory. "We are skeptical of a significant and sustained recovery in manufacturing, given that the weakness in consumption and housing reflects structural issues more than cyclical issues," Barclays analysts say in a note. Developers led the declines, with Longfor Group slumping 4.7% and Yuexiu Property dropping 3.2%. The Hang Seng Tech Index shed 0.4%, with Meituan retreating 4.25% and JD.com falling 2.3%.

Japanese stocks ended higher, led by gains in tech stocks and trading houses, as concerns about further tightening by the Fed continue to recede. Recruit Holdings gained 3.7% and Mitsubishi Corp. climbed 3.2%. The Nikkei Stock Average rose 0.9% to 32619.34. The 10-year Japanese government bond yield falls half-a-basis point to 0.645%. Investors are focusing on eurozone and US inflation data due later in the day for their policy implications. USD/JPY is at 146.00, compared with 146.25 as of Wednesday 5 p.m. Eastern Time.

Indian shares ended lower, weighed down by declines in financial and industrial stocks. Investors are focusing on India's gross domestic product data for the April-June quarter due later in the day. The benchmark Sensex ended 0.4% lower at 64831.41. IndusInd Bank dropped 1.2% and Axis Bank and Bajaj Finserv each fell 0.9%. Power Grid Corp. of India retreated 1.0%. Among gainers. Maruti Suzuki India added 2.2% and Jio Financial Services gained 0.4%.

Europe

European stocks mostly fell after US initial jobless claims came in better than expected, sparking concerns that interest rates might rise again. "While the US economy may be slowing, the labor market is showing signs of resilience," Validus Risk Management's head of global capital markets North America, Ryan Brandham, writes. "There is data still to come ahead of the September Fed meeting, but this result indicates another hike this year may still be on the cards." The Stoxx Europe 600 dropped 0.2%, and France's CAC 40 fell 0.7%, though Germany's DAX gained 0.4%.

The FTSE 100's streak of five consecutive days of gains ended on Thursday, with Prudential the biggest faller after being Wednesday's top-riser. Second-to-last Diageo fell 2.3% after peer Pernod Ricard warned US sales would decline as the economy slows toward the year-end. Today's top boy was Ocado, rising 9.9%. "It's been a subdued end to what has been a negative month for European markets, with the FTSE 100 once again finding a base just above the 7,210 level," CMC Markets Analyst Michael Hewson says. The index closed down 0.46% at 7,439.13 points.

North America

A late-August rally lost some sizzle Thursday, sapping major stock indexes of momentum as they enter a month that is traditionally their weakest of the year.

Investors still have confidence in the US economy, as well as the potential for artificial intelligence to boost productivity gains, but stock markets fell for much of August before turning upward. The S&P 500 and Nasdaq Composite snapped five-month winning streaks, while the Dow Jones Industrial Average posted its first monthly loss since May.

August's declines were broad, though shallow. They spanned big banks, carmakers and tech giants. Energy stocks were the only slice of the S&P 500 to post monthly gains.

Despite a similarly broad rebound over the previous four trading sessions, major indexes were mixed Thursday. The Dow opened in the green but gave up those gains in the afternoon en route to a 0.5% decline of about 168 points. The S&P 500 dipped 0.2% lower, while the tech-heavy Nasdaq Composite climbed 0.1%.

Investors saw the tepid August as a pause for markets after months of summer travel, Taylor Swift concerts and " Barbenheimer" box-office bonanzas suggested that US consumers haven't cracked beneath the higher interest rates aimed at curbing inflation.

"It's been a YOLO summer" for consumers, said Rusty Vanneman, chief investment officer at Orion, using the acronym for "you only live once."

Americans in July spent more in areas such as housing, restaurants and insurance, the Commerce Department said Thursday. That helped nudge the personal-consumption expenditures price index, the Federal Reserve's preferred inflation gauge, higher.

Positive economic data has pushed many investors to believe that the Fed will keep rates higher for longer to tame inflation, buoying yields on longer-term government debt. While the benchmark 10-year Treasury yield edged downward to 4.090% on Thursday, it remained 0.134 percentage point higher than at the start of August. Yields on 2-year Treasurys, a rough proxy for investors' near-term inflation expectations, were down 0.017 percentage point in August.

That uptick has enticed investors away from stocks. To avoid associated volatility, Vanneman has advised clients to diversify portfolios with assets such as non-U. S. bonds, shares in natural-resource-producing companies and commodities.

"All else equal, [a higher interest rate] does put pressure on the stock market," Vanneman said.

Benchmark US crude eked out a 2.2% gain in August, to $83.63 a barrel, as Saudi and Russian production cuts forced companies to draw down their stockpiles. Natural-gas futures for October delivery rose 5.1% during the month.

Investors on Friday will parse a jobs report that will offer clues on whether the Fed's rate increases are cooling hiring and wage growth to central bankers' liking. Economists polled by The Wall Street Journal expect employers added 170,000 workers in August, down from July's 187,000, with unemployment steady at 3.5%.

Clayton Allison, a portfolio manager at Prime Capital Investment Advisors, said he has increasingly advised clients to eye small- and midcap stocks that could capitalize on a robust US economy and limit any fallout should the outlook darken.

"The consumer has been so resilient over the last three or six months," he said. "A lot of people probably didn't expect that with interest rates going up."

Allison is among the investors who have begun to broaden their focus away from the big tech firms that have gobbled up much of this year's AI-related gains and pushed up stock valuations. Even so, those firms propped up broader indexes on Thursday.

Enterprise-software giant Salesforce was the Dow's best performer, rising 3% after posting better-than-expected earnings. Amazon.com climbed 2.2%, while Apple earned a fifth consecutive daily gain. Chip maker Nvidia edged 0.2% higher, finishing August up 5.6%.