Asia's chip trade roars while Wall Street sits out Labor Day

• South Korea's Kospi is trading 4.38% higher at 6,980.28 and Japan's Nikkei 225 is up 1.93% at 66,272.96 late in its session; Taiwan's benchmark finished 1.67% ahead at 47,326.27.
• Greater China is the exception: the Hang Seng is down 0.94% at 25,409.91 and the Shanghai Composite is flat, off 0.02% at 3,929.20.
• Wall Street ended Friday lower — the S&P 500 closed down 0.38% at 7,718.60, the Nasdaq Composite off 0.29% at 26,506.99 and the Dow 0.51% weaker at 53,414.25. US cash equity and Treasury markets are closed today for Labor Day; S&P 500 futures at 7,722 are unchanged, and even that read comes from a holiday session.
• Europe finished Friday going nowhere: the FTSE 100 ended flat at 10,831.09, the DAX up 0.17% and the CAC 40 down 0.09%.

Friday's US employment report is the hinge. Payrolls rose 162,000 in August against a consensus nearer 53,000, June and July were revised up by a combined 55,000, unemployment held at 4.1% and average hourly earnings ran at 3.1% year on year. That is not a labour market asking for help, and futures markets swung back towards pricing a rate rise at the 15-16 September Fed meeting, with the probability climbing back above 60%. Short and intermediate yields did the work: the five-year rose 4.1 basis points to 4.55%, the ten-year 2.2 basis points to 4.784%.

The index-level falls hid a violent rotation. Higher discount rates hurt companies whose value sits far out in the future, and enterprise software wore it — Guidewire fell 19.93% on soft subscription guidance despite beating on the quarter, UiPath 16.63% and Asana 12.69%. Semiconductors went the other way, with SanDisk up 11.90%, Cerebras 10.30% and Astera Labs 9.75%, and that is precisely the impulse Asia has traded overnight: Korean and Japanese memory and chip-equipment names are where the gains are concentrated.

Running underneath is the Middle East. Washington struck three Iranian tankers at the weekend and Tehran said it hit tankers and US-linked shipping in reply, with its parliamentary speaker declaring the era of proportionate responses over. Brent is holding at $96.28, up 9.76% over the past month, and gold has added 1.06% to $4,476.60.

Equity investors are not paying up for protection: the VIX closed Friday at 14.53 and the MOVE index of rates volatility fell 2.11% to 73.10, so neither stock nor bond markets are pricing the Iran escalation as a systemic event. The safe-haven bid is selective — gold is 2.96% higher over five days, but the dollar index is barely moved at 99.121 and the yen has firmed, with USD/JPY down 2.53% over the week to 155.71. Breadth on Friday was mediocre rather than broken: PrimerIQ's US universe showed 3,005 advancers against 2,740 decliners, a ratio of 1.10. The dispersion is the real story — technology gained 0.70% while consumer discretionary lost 1.33% and communication services 1.19%. This is a tape rewarding one theme and punishing everything with a guidance wobble.

The UK's headline print landed at 07:00 BST: the Lloyds house price index (formerly Halifax) showed August prices down 0.2% on the month and 0.4% on the year, with the average property at £298,468. Germany's July industrial production, also out at 07:00 BST, fell 1.1% month on month against expectations of a small rise, dragged down by autos — a reminder that the euro area's industrial core is still contracting even as equity markets there hold up.

The euro zone Sentix investor confidence survey follows later this morning. Beyond that the calendar is bare, because the United States is shut for Labor Day: no data, no cash trading, no Treasury market, and thinner liquidity than usual for anything Europe does today. The week's actual test is Friday's US August CPI at 13:30 BST, which arrives ahead of the Federal Reserve's 15-16 September decision; the Bank of England follows on 17 September.

Nothing of consequence has reported this morning, and the tape is still digesting Friday afternoon in New York, where enterprise software was taken apart. Guidewire's 19.93% fall came despite a revenue and earnings beat, undone by fiscal first-quarter guidance below the Street, while UiPath dropped 16.63% even after beating and raising, because implied growth ahead slowed sharply. Outside software, Lululemon fell 17.38% on heavy volume, and the credit-scoring complex was hit together after a senior US housing regulator publicly questioned the bureau model, with Fair Isaac down 16.68%, Equifax 6.37% and TransUnion 5.93%.