US new home sales fell in August, but had little impact on the market. Investors were cautious ahead of heavy PCE inflation data and Fed Chair Powell's speech, with US stocks slightly lower, only NASDAQ up slightly, while the Russell small-cap index fell over 1%, trailing behind energy, medical care, and raw materials sectors, with only utilities and technology sectors rising. In key stocks, Nvidia was up more than 2%, Meta showcased its AI and VR capabilities at the Connect annual developer conference, launching a series of AI update products, hitting a new high in stock price. Strong demand for AI-positive financial reports sent Micron Technology soaring 13% after hours.

FOMC member Kugle expressed "strong support" for a 50 basis point rate cut, Fed monetary policy lags and needs a proactive rate cut. The market is pricing in another 75 basis point rate cut by the Fed this year, with a 59% chance of a 50 basis point rate cut at the November meeting, up from 37% a week ago, with a 41% chance of a 25 basis point cut.

The US dollar and US bond yields rose, with the US dollar posting its biggest gain in three months, offshore RMB rising above 7 before falling back, and the Japanese Yen falling more than 1% before briefly falling to 145. US oil fell nearly 3.3% to below $69 during the session, with reports that Libya may resume exports. Gold soared above $2670, hitting a historical high before profit-taking by investors.

In early US trading, the Dow and S&P 500 hit intraday highs, but later retreated to close at daily lows, with the Dow closing down nearly 300 points, ending a four-day rally, and the S&P 500 bidding farewell to its all-time high, while Chinese concept stocks pulled back. At its daily low, the Dow fell over 348 points or 0.8%, the S&P 500 fell nearly 0.4%, and the Nasdaq fell nearly 0.2%:

• Only the Nasdaq rose among the three major U.S. indexes: the S&P 500 index fell by 10.67 points, a decrease of 0.19%, closing at 5722.26 points. The Dow, which is closely related to the economic cycle, fell by 293.47 points, a decrease of 0.70%, closing at 41914.75 points. The Nasdaq, with a majority of technology stocks, rose by 7.68 points, an increase of 0.04%, closing at 18082.21 points. The Nasdaq 100 rose by 0.14%, and the Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology sector stocks, rose by 0.43%. More sensitive to the economic cycle.E-mini Russell 2000 Index It fell by 1.19%. The VIX fear index rose by 0.13% to 15.41.

Most major US indices fell, with small-cap stocks posting the largest declines, while the NASDAQ closed slightly higher.

• Most US sector ETFs closed lower. The semiconductor ETF rose nearly 1%, while the utility ETF surged over 0.5%. On the other hand, the energy sector ETF fell nearly 2%, the biotech index ETF and regional bank ETF each fell over 1.5%, while the banking ETF, global aviation industry ETF, and medical industry ETF each fell around 1%, and the financial industry ETF also fell over 0.5 %.

• Most of the 11 sectors of the S&P 500 Index fell. The energy sector dropped 1.9%, the healthcare sector dropped 0.94%, the financial sector dropped 0.6%, the raw materials sector dropped 0.6%, the industrial sector dropped 0.46%, the real estate sector dropped 0.4%, the consumer discretionary sector dropped 0.38%, the telecommunication sector dropped 0.04%, the consumer staples sector dropped 0.03%, and the information technology/technology sector rose 0.5%, while the utilities rose 0.54%.

• In terms of investment research strategy: Morgan Stanley's Chief Equity Strategist in China, Wang Ying, pointed out that the policy support of the People's Bank of China will improve investor sentiment and market liquidity. It is expected that A-shares and Hong Kong stocks will have a positive reaction in the short term. The policy effect depends on the macroeconomic recovery and corporate earnings. According to reports from Goldman Sachs' institutional brokers, hedge funds are buying Chinese stocks in large quantities, with the Chinese stock market recording the largest single-day net buying since March 2021 on Tuesday, reaching the second-highest level in the past decade. Buying pressure is almost entirely dominated by investors with long positions.

• The 'Tech Seven Sisters' had mixed performances. Nvidia rose 2.18%, reaching nearly 3.4% during the session. Tesla turned positive by 1.08%. 'Metaverse' Meta rose by 0.88% at the Meta Developers Conference, unveiling the cheaper Quest 3S headset, the first prototype of Orion AR smart glasses, and updating the multimodal large language model. Microsoft rose by 0.69%, while Google A fell by 0.49%. Google accused Microsoft of restricting customers from using cloud infrastructure products other than Azure, alleging anti-competitive behavior. Apple dropped by 0.44%, and Amazon fell by 0.74%.

Nvidia's market cap once again exceeded 3 trillion USD (while Google A and Amazon returned to above 2 trillion USD).

• Bain & Company forecasts that the global artificial intelligence market could reach $990 billion by 2027, with a projected annual growth rate of 40% to 55% for the market including AI-related services and hardware. In addition, by 2026, demand for upstream chip components may grow by 30% or more, while the cost of large data centers may increase from $1 billion to $4 billion to $10 billion to $25 billion over five years.

• Most chip stocks rose. The PHLX Semiconductor Index rose by 0.8%. The industry ETF SOXX rose by 0.69%, while Nvidia's double long ETF rose by 4.32%. Taiwan Semiconductor's US stock rose by 0.21%. Applied Materials rose by 0.27%, ASML ADR rose by 0.51%, KLA Corp rose by 0.22%, Arm Holdings rose by 2.18%, Intel rose by 3.2%, Broadcom rose by 0.39%, AMD rose by 2.34%, Qualcomm rose by 0.79%, Micron Technology rose by 1.88%. The company's data center DRAM products are being driven by AI demand, with performance guidance exceeding expectations, and the stock price rose by more than 13% in after-hours trading. On the other hand, ON Semiconductor fell by 1.16%, and Marvell Technology fell by 0.03%.

• AI concept stocks mostly saw gains. SoundHound AI, a company in which Nvidia holds shares, fell by 0.2%, Super Micro Computer fell by 1.18%, Serve Robotics fell by 5.45%, CrowdStrike fell by 0.72%, while Oracle rose by 0.29%, with BigBear.ai and BullFrog AI remaining flat. Palantir rose by 0.6%, Snowflake rose by 0.11%, Dell Technologies rose by 2.44%, and C3.ai rose by 4.09%.

• Chinese concept stocks retreated. The Nasdaq Golden Dragon China Index fell by 2.8%. In the ETFs, the China Technology Index ETF (CQQQ) fell by 2.55%. The China Internet Index ETF (KWEB) fell by 2.56%. The FTSE China 3x Bull ETF (YINN) fell by 7.98%, while the FTSE China 3x Bear ETF (YANG) rose by 7.41%.

• Among the popular China concept stocks, Mengniu Dairy ADR fell by 6.21%, Nio Inc fell by 4.88%, Li Auto Inc fell by 3.84%, Xpeng fell by 3.43%, Xpeng fell by 2.52%, Bilibili fell by 1.93%, JD.com fell by 2.04%, Meituan ADR fell by 4.03%, Vipshop fell by 4.16%, Trip.com fell by 3.73%, Netease fell by 0.1%, New Oriental fell by 4.29%, Alibaba fell by 1.78%, Baidu fell by 0.84%, Tencent ADR fell by 2.31%, while PDD Holdings rose by 0.12%, and Miniso rose by 4.48%.

• Other key stocks: (1) Bank of America fell by 0.51%. During September 20-24, Buffett cashed out another $0.863 billion worth of Bank of America shares, reducing his stake to 10.5%. (2) Morgan Stanley is bearish on the future of the U.S. car industry and downgraded several U.S. car companies, with General Motors falling by 4.87%, Ford falling by 4.14%, and Rivian falling by 6.84%.

European stocks opened collectively lower and ended slightly lower:

The pan-European Stoxx 600 index fell by 0.11% to 519.14 points. The German index fell by 0.41%. The French index fell by 0.50%. The Italian index fell by 0.12%. The UK index fell by 0.17%. The Spanish index fell by 0.38%. The Dutch index fell by 0.12%.

As investors await inflation and employment data, U.S. bond yields rose across the board, with the 10-year U.S. Treasury yield rising by over 5 basis points. The 2/10-year U.S. Treasury yield curve continued to steepen, reaching the highest level since June 2022:

• US Bonds: At the close, the 2-year U.S. Treasury yield, more sensitive to monetary policy, rose by 1.52 basis points to 3.5531%, trading in the range of 3.5%-3.5551% during the session. The benchmark 10-year U.S. Treasury bond yield rose by 5.49 basis points to 3.7830%, trading in the range of 3.7242%-3.7849% during the session.

• Eurozone Bonds: The 10-year German bond yield rose by 2.8 basis points. The 2-year German bond yield rose by 2.5 basis points. The French 10-year Treasury yield rose by 5.1 basis points, the Italian 10-year Treasury yield rose by 4.5 basis points, the UK 10-year Treasury yield rose by 4.9 basis points, and the 2-year UK bond yield rose by 4.4 basis points.

• On the news front, (1) The Riksbank of Sweden cut rates by 25 basis points to 3.25% and hinted at a further 50 basis points rate cut in November, followed by a 25 basis points cut in December. (2) The Governor of the Bank of France stated that the French debt issue needs urgent attention as the bond market sends out more and more warnings. (3) Bank of England policymaker Greene supports a 'gradual' approach to easing policy restrictions.

US bond yields rose across the board, with long-term yields increasing even more.

The US Dollar Index (DXY) rose by 0.46%, marking the largest increase since June 7th. The Japanese Yen and other currencies fell by over 1%, while offshore RMB rose above 7 and then experienced the deepest intraday drop of nearly 280 points:

• USD: The trade-weighted US Dollar Index (DXY) rose by 0.46% against a basket of six major currencies, reaching 100.926 points, with an intraday trading range of 100.224-100.991.

• Bloomberg Dollar Index rose by 0.65% to 1226.26 points, with an intraday trading range of 1216.47-1226.26 points.

The US dollar strengthened, marking the largest single-day increase in three months.

• Non-US currencies generally fell: EUR/USD fell by 0.43%, GBP/USD fell by 0.69%, USD/CHF rose by 0.84%; Among commodity currencies, AUD/USD fell by 0.99%, NZD/USD fell by 1.21%, USD/CAD rose by 0.40%.

• Japanese Yen: USD/JPY fell by 1.05% to 144.71 JPY, with an intraday trading range of 142.91-144.84 JPY. JPY/EUR fell by 0.59% to 161.08 JPY; JPY/GBP fell by 0.34% to 192.732 JPY.

• Offshore Renminbi (CNH): CNH weakened by 218 points at the close, reaching 7.0328 yuan. Offshore RMB broke the 7.0 threshold in the early Asian market for the first time since May last year, but then fell back. It briefly dropped to 7.0358 yuan at the close.

Offshore renminbi rose above 7 and the upward momentum waned.

• Most cryptocurrencies fell. The market capitalization leader Bitcoin fell 1.42% in the end, closing at $63,545.00. The second largest Ethereum fell 2.79% at the end, closing at $2,581.00.

Bitcoin experienced large gains and losses, hitting a low of $63,000 and touching a high of $64,500.

The Middle East's tense geopolitical situation has little impact on oil prices. The latest news from Libya dominates, while the bullish EIA crude oil inventory data only caused a slight reaction. Investors' concerns about the disruption of Libyan supply eased, worrying about oil demand prospects, causing the deepest intraday drop in US oil by nearly 3.3% to below $69, and Brent crude dropping over 2.8% to below $73.

• US oil: WTI November crude oil futures closed down $1.87, a decline of over 2.61%, at $69.69 per barrel.

• Brent crude: Brent November crude oil futures closed down $1.71, a decline of over 2.27%, at $73.46 per barrel.

• On the news front, EIA crude oil inventories fell by more than 4.47 million barrels last week. According to CCTV news, the Israeli army launched a large-scale attack in southern Lebanon and the Bekaa region. The Lebanese side said that the Israeli airstrikes since the 23rd have resulted in 1,247 deaths.

• ABN AMRO has lowered its average Brent crude oil price forecast for 2025 from $85 per barrel to $70 per barrel, citing poor demand and oversupply. However, UBS analyst Giovanni Staunovo expects Brent crude oil to rebound to above $80 per barrel, as the moderate supply growth in the face of slowing economic activity keeps the oil market in a supply deficit. Additionally, UBS no longer insists that Brent crude oil will rise to $90 per barrel this year.

• Natural gas: U.S. natural gas futures fell more than 3.37% in October, closing at $2.6370 per million British thermal units.

The strength of the U.S. dollar is pressuring oil prices, with U.S. oil falling 3% at one point.

Expectations of a significant 50 basis point rate cut by the Federal Reserve once again supported gold prices, with spot gold rising above $2670 in the Asian session to reach a new historical high. However, due to profit-taking by investors, gold prices retraced their gains:

• Gold: COMEX December gold futures rose 0.17% at the close, at $2681.50 per ounce, reaching $2694.90 during the Asian session. Spot gold in the Asian session once again hit a daily high, rising over 0.5% to $2670.57, hitting a new historical high. U.S. stocks briefly fell by nearly 0.3% to below $2650 during midday, then reversed to rise 0.01% at the close, at $2657.28 per ounce.

• Silver: COMEX December silver futures fell 0.97% at the close, at $32.120 per ounce. Spot silver briefly rose during the Asian session, nearing a 0.6% increase to almost $32.30, but then continued to decline. At midday, U.S. stocks fell by over 1.6% to below $31.60, closing down 0.89% at $31.8115 per ounce.

• On the news front, China Securities Co., Ltd. believes that the gold price above $2600 is overbought and suggests profit-taking in the short term. Despite the 50 basis point rate cut by the Federal Reserve boosting gold prices, the market had already traded quite fully earlier, and the potential economic and inflation slowdown behind the rate cut may constrain gold price increases. Gold price is expected to fluctuate in the range of $2300 to $2500.

• London's industrial base metals varied. The economic barometer 'Dr. Copper' closed up $17 at $9813 per ton. London zinc closed down $12. London aluminum closed down $18. London nickel closed up $86. London tin fell over 1.79%. London lead closed up $12. COMEX copper futures fell 0.11% to $4.4865 per pound.

Gold prices hit another new historical high during the Asian session, then fell back.

Editor/Rocky