As of the time of publication, the three major US stock indexes saw a slight increase, $Nasdaq Composite Index (.IXIC.US)$ up 0.75%, $S&P 500 Index (.SPX.US)$ up 0.46%, $Dow Jones Industrial Average (.DJI.US)$ up 0.25%.

On Tuesday, US August retail sales unexpectedly rose, suggesting that the US economy remained on solid ground for most of the third quarter.

The data shows that after being revised up to 1.1% in July, US retail sales increased by 0.1% month-on-month in August. Excluding retail sales of automobiles, gasoline, building materials, and food services, which were revised up to 0.4% in July, they increased by 0.3% last month.

Core retail sales align closely with consumer spending in GDP. Consumer spending accelerated in the second quarter, putting it on a higher growth path before entering the July-September quarter.

US retail sales in August were $710.773 billion, compared to a previous value of $709.668 billion. Excluding food and energy items, US core retail sales in August were $576.478 billion, compared to a previous value of $576.084 billion.

Another piece of data shows that US Redbook retail sales for the week ending September 14 increased by 4.6% year-on-year, compared to a previous value of 6.5%.

Market focus has shifted to the Federal Reserve's policy. The Federal Reserve started its two-day monetary policy meeting on Tuesday Eastern Time, with the meeting results scheduled to be released on Wednesday Eastern Time. Federal Reserve Chairman Powell will then hold a press conference.

The market has long anticipated the Federal Reserve's interest rate cut. Against the backdrop of high borrowing costs and persistent inflation, the Federal Reserve's interest rate cut may help boost corporate profit growth. The Federal Reserve began its aggressive rate-hiking campaign in March 2022.

While Wall Street expects the Federal Reserve to cut interest rates on Wednesday, there are differences in the market regarding the magnitude of the potential rate cut.

According to the CME Group's Fed Watch tool, traders currently price in a 67% probability of a 50 basis point interest rate cut by the central bank. This is an increase from last Friday's probability of about 47%.

Seema Shah, Chief Global Strategist at Principal Asset Management, said, "There is a divergence in market expectations between a 25 basis point and a 50 basis point interest rate cut due to conflicting signals of robust economic activity and a weak labor market, making the rate decision outlook for the Fed complex. The market rarely has such different and yet so close expectations for the Federal Open Market Committee meeting."

Although a 50 basis point rate cut is not impossible, Seema Shah believes that the Fed should take a more cautious approach and cut rates by 25 basis points. She predicts that the Fed will cut rates by 25 basis points in November and December respectively.

According to Tom Lee, Head of Research at Fundstrat, the stock market may experience a several-week rebound following the significant interest rate decision by the Fed on Wednesday. He said, "There are some positive factors at play currently. We know that the Fed is about to cut rates. Given that the inflation data supports a rate cut and the labor market also needs some support, I think this will give the market confidence. I believe we will see a good performance in the market during and in the couple of weeks after the meeting."

Tom Lee said, "I think the key is whether Powell can convey the message that this is the beginning of a cycle and they are confident that we are moving towards neutral rates. Whatever decision they make, it is actually dovish."

Investment bank Wedbush said in an investor report that if the Fed cuts rates this week, a range of technology stocks, especially popular companies in the artificial intelligence field such as Nvidia, may benefit.

Wedbush analyst Daniel Ives said, 'In short, we believe that with the Federal Reserve and Powell starting the interest rate cut cycle this week, a soft landing on a macro scale is still possible. Tech companies' spending on artificial intelligence is still in the early stages of the cycle. We believe that tech stocks are ready to rise at the end of the year and in 2025.'

Daniel Ives pointed out that in addition to Nvidia, other technology companies related to artificial intelligence will also benefit from this rate cut, including Microsoft, Oracle, Palantir, Salesforce, Dell Technologies, IBM, Apple, AMD, and ServiceNow.

Focus stocks

Growth tech stocks are generally rising $Tesla (TSLA.US)$Please use your Futubull account to access the feature.$Intel (INTC.US)$Up more than 3%, $Microsoft (MSFT.US)$ and $Amazon (AMZN.US)$ Up about 2%, $Alphabet-A (GOOGL.US)$ Up more than 1%.

China concept stocks are strong. $Li Auto (LI.US)$ Rise nearly 9%, $XPeng (XPEV.US)$ Rise nearly 5%, $NIO Inc (NIO.US)$ Up more than 4%. $JD.com (JD.US)$ Up more than 3%, Wheaton Precious Metals (WPM.US) fell more than 13%, with silver falling more than 4%, and others falling more than 2%. $Alibaba (BABA.US)$ The TOPIX index rose more than 2%.

Aviation/airlines industry as a whole is rising. $United Airlines (UAL.US)$ Up more than 4%. $American Airlines (AAL.US)$Please use your Futubull account to access the feature.$Delta Air Lines (DAL.US)$ Up more than 3%, Wheaton Precious Metals (WPM.US) fell more than 13%, with silver falling more than 4%, and others falling more than 2%. $Southwest Airlines (LUV.US)$ Up more than 1%.

$Intel (INTC.US)$ Rising by over 2%, the company and Amazon AWS will jointly invest in a "multi-year, multi-billion dollar framework" for custom AI computing chips.

$Microsoft (MSFT.US)$ Increasing by nearly 2%, the company announced on Tuesday that it will raise the dividend by 10% to 83 cents per share and establish a buyback plan of up to $60 billion to reward shareholders and boost the company's stock price. This move, amidst intensified global competition in the technology industry, aims to maintain Microsoft's leading position in the market. Through the dividend increase and buyback plan, Microsoft hopes to attract more investor attention and enhance the company's market competitiveness.

$Alphabet-A (GOOGL.US)$ A jump of over 1%, on Tuesday, the company stated in a release that, due to concerns about its environmental impact on the Chilean capital, it will completely rework the $0.2 billion datacenter plan in Santiago from scratch.

$Amazon (AMZN.US)$ Rising by nearly 2%, the company announced on Tuesday that this year's Prime member event, "Prime Big Deal Days," is officially scheduled for October. It is reported that the event will start at 15:01 on October 8, 2024, Chinese time, and will last for two days, offering a series of holiday discounts. Bank of America Merrill Lynch maintains a buy rating for Amazon, with a target price of $210.

$Dada Nexus (DADA.US)$ Rises more than 14%, JD.com acquires all the shares of Dada held by Walmart, increasing its stake to 63.2%.

Editor/Somer