Fed Chair Powell's hawkish remarks stated that he does not think the Fed is eager to cut interest rates, and if the economy meets expectations, the Summary of Economic Projections (SEP) will indicate that the FOMC will implement two separate 25 basis point rate cuts (lower than market expectations). In addition, this year's FOMC voter and Atlanta Fed President Bostic stated that they are open to cutting rates by 50 basis points again if the US labor market is weak.

Powell's hawkish comments dampened the rate-cutting frenzy, with the market expecting the probability of a 50 basis point rate cut by the Fed in November to drop significantly to 36.2%. US bond yields and the US dollar rose together, with the two-year US bond yield rising by nearly 10 basis points, the US dollar index rising by over 0.2%, resulting in a decline in precious metals and non-US currencies, with the yen falling by over 1% at one point. US stocks also saw a short-term decline, with the S&P falling by over 0.6% at one point, but accelerating to a new high at the close.

Internationally, German inflation slowed down with the CPI in September at 1.6%, falling below 2%. At the same time, Lagarde mentioned increased confidence in controlling inflation, and the market expectation for an interest rate cut by the ECB in October has heated up again. Bank of America predicts that the ECB's next interest rate cut will be moved up from December to October, and Barclays expects the ECB to lower rates in October, continuing the rate cuts until June of next year.

Powell's hawkish comments have lowered rate cut expectations, with the market expecting less than 3 rate cuts in 2024.

Despite Fed Chair Powell's indication that he is not in a rush to further cut interest rates, causing US stocks to fall in the afternoon, the Dow and S&P still hit record highs at the close. Historically, US stocks tend to perform poorly in September, but all three major indices rose during the month, with the S&P posting its best September performance since 2013 and continuing to rise for five consecutive months. The Dow, closely related to the economic cycle, rose by 17.15 points, 0.04%, closing at 42330.15 points, with a 1.85% rise in September. The tech-heavy Nasdaq rose by 69.58 points, 0.38%, to 18189.17 points, with a 2.68% rise in September. The Nasdaq 100 rose by 0.26%, up 2.48% in September. The Nasdaq Technology Market Cap-Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech stocks, rose by 0.40%, accumulating a 2.15% rise in September. The Russell 2000 index, more sensitive to the economic cycle, rose by 0.24%, accumulating a 0.56% rise in September. The VIX fear index fell by 1.42% to 16.72, with a 7.52% rise in September, rising to its highest level in the period at 23.76 on September 7.

• In September, the Russell 2000 small-cap index rose by 0.4%, the semiconductor index rose by 0.3%, and the China concept stock index soared nearly 30%. In the third quarter, the Dow rose by 8.2%, the S&P rose by 5.5%, marking the longest consecutive quarterly gain since 2021, the Nasdaq rose by 2.6%, small-cap stocks rose by 8.7%, the semiconductor index fell by 5.5%, and the China concept stock index soared by over 26%. The public utility sector had the best performance in the S&P, exceeding 18% for the biggest increase since 2003, while the real estate sector was the second best with a rise of nearly 16%.

• All three major US stock indices rose in September: the S&P 500 closed up 24.31 points, up 0.42%, at 5762.48 points, with a cumulative increase of 2.02% in September, marking the best September performance since 2013 and a fifth consecutive monthly increase. The Dow, closely related to the economic cycle, rose by 17.15 points, 0.04%, to 42330.15 points, with a 1.85% rise in September. The tech-heavy Nasdaq rose by 69.58 points, 0.38%, to 18189.17 points, with a 2.68% rise in September. The Nasdaq 100 rose by 0.26%, up 2.48% in September. The Nasdaq Technology Index, which measures the performance of Nasdaq 100 tech stocks, rose by 0.40%, accumulating a 2.15% rise in September. The Russell 2000 index, more sensitive to the economic cycle, rose by 0.24%, with a 0.56% rise in September. The VIX fear index fell by 1.42% to 16.72, with a 7.52% rise in September, having reached its highest level in the period at 23.76 on September 7.

• Most US sector ETFs closed higher. Regional bank ETFs and banking sector ETFs both rose by over 1%, while energy sector ETFs and medical sector ETFs saw gains close to 1%. Biotechnology sector ETF, entertainment sector ETF, and financial sector ETF each rose by less than 0.5%. However, semiconductor ETF fell by nearly 1%, and global aviation sector ETF also dropped by over 0.5%.

• 11 sectors of the S&P 500 index rose more than fell. Energy sector rose by 0.83%, telecom sector by 0.79%, information technology/tech sector by 0.58%, consumer discretionary sector fell by 0.28%, and materials sector fell by 0.6%.

• In September, consumer discretionary sector accumulated a 7.02% increase, utilities sector rose by 6.43%, telecom sector rose by 4.53%, industrial sector rose by 3.27%, real estate sector rose by 2.73%, tech sector rose by 2.45%, materials sector rose by 2.41%, daily consumer goods sector rose by 0.59%, financial sector fell by 0.67%, healthcare sector fell by 1.82%, energy sector fell by 2.79%.

• In terms of investment strategy, Goldman Sachs' Peter Oppenheimer believes that the US stock market is relatively high in valuation, and future increases will slow down, with valuation expansion potentially more pronounced in Europe or China, especially those European stocks related to China are expected to further benefit from China's large-scale stimulus measures. BlackRock has shifted to overweight China stocks anticipating significant fiscal stimulus measures in China.

• Most of the 'Tech Seven Sisters' rose. Apple closed up 2.29%. Google Class A rose 1.16%. The USA cancels SB-1047 bill, allowing global developers to continue using large models open-sourced by American tech giants like Meta and Google. Google plans to invest 1 billion USD to build a data center in Thailand to accelerate the development of AI in Asia. 'Metaverse' Meta rose by 0.9%, Microsoft rose by 0.53%, Tesla rose by 0.45%, Nvidia turned from a 2.7% drop to a 0.03% rise, with a cumulative 1.73% rise in September, continuing the 2.01% rebound from August. However, it marks the first quarterly decline since 2022 with a 1.7% decline for the third quarter. Amazon fell by 0.87%.

• Most semiconductor stocks fell. The Philadelphia Semiconductor Index fell by 0.85%, with a 0.28% cumulative rise in September. The industry ETF SOXX fell by 0.9%; Nvidia's two-times long ETF rose by 0.1%. Intel fell by 1.88%, TSMC ADR fell by 2.42%, Broadcom fell by 0.11%, Arm Holdings fell by 1.77%, Micron Technology fell by 3.53%, Applied Materials fell by 1.4%, ASML ADR fell by 0.99%, KLA fell by 1.02%, AMD fell by 0.16%, Qualcomm fell by 0.05%, AMD fell by over 5%, while Marvell Technology rose by 1.59%, Silicon Motion Technology ADR rose by over 0.2%, and Seagate Technology rose by over 0.7%.

• In September, Micron Technology rebounded by 7.76%, while Arm rose by 7.62% after falling by 11.89% and 7.83% in the previous two months. Intel rose by 6.44%, but the trend of continuous decline since 2024 has not changed. TSMC rose by 1.52%, continuing the 3.56% rise in August. Super Micro Computer fell by 4.87%, continuing the previous two months of 14.37% and 37.62% declines.

• AI concept stocks showed mixed movements. Dell Technologies fell by 1.4%, with Dell Technologies CEO Michael S Dell selling 10 million shares of Dell stock on September 26, cashing out 1.22 billion USD. Super Micro Computer fell by 0.8%. Serve Robotics fell by 7.34%, CrowdStrike fell by 1.89%, BullFrog AI fell by 3.69%, Nvidia-backed AI voice company SoundHound AI fell by 2.51%, BigBear.ai fell by 5.81%, while C3.ai rose by 0.04%, Snowflake rose by 0.83%, Oracle rose by 0.98%, and Palantir fluctuated by 0.98%.

• China concept stocks surged then retreated. The Nasdaq Golden Dragon China Index rose over 7% in midday trading before closing up 0.45%, with a 29.60% cumulative rise in September. In ETFs, the China Technology Index ETF (CQQQ) rose by 3.88%, with a 28.91% cumulative rise in September. The China Internet Index ETF (KWEB) rose by 0.12%, with a 32.23% cumulative rise in September. The FTSE China 3x Bulls ETF (YINN) rose nearly 6% before falling by 3.65%, while the FTSE China 3x Bears ETF (YANG) closed up by 4%.

• The FTSE A50 futures fell over 1.80% in overnight trading before closing down by 1.32%, at 13716.000 points, with a cumulative rise of over 18.75% in September. Hang Seng Index futures fell by over 2.18% in overnight trading, while the Hang Seng Tech Index futures fell by 3.72%.

• Among popular China concept stocks, Fangdd Network rose by 146.03%, Nio surged over 18% before closing up by 2.45%, Zeekr rose by nearly 20% before closing up by 5.69%, Li Auto rose by nearly 10% before falling by 0.5%, Xpeng rose by over 7% before falling by 4.25%, New Oriental surged over 10.9% before closing up by 3.23%, Miniso rose by over 15% before closing up by 2.39%, Bilibili rose by nearly 10% before closing up by 2.01%. JD.com rose by over 6.8% before closing up by 0.25%, with JD.com announcing a 1.5 billion yuan investment in the Hong Kong market, with no upper limit in the long term. Baidu rose nearly 5.6% before closing up by 0.11%, Netease rose nearly 3.9% before falling by 0.07%, PDD Holdings rose by over 5.6% before falling by 0.42%, Alibaba rose by over 4.5% before falling by 1.13%, and Tencent ADR fell by 2.88%.

Several European car companies issued profit warnings due to a slowdown in the automotive market and increasing competition, leading to a 4% decline in the automotive sector, which was the main drag, causing the pan-European stock index to fall by 1% on Monday. The European luxury goods stocks fell by 2%, affecting French stocks, but most luxury goods stocks rose in September. Novo-Nordisk fell by 16.13% in September.

The pan-European Stoxx 600 index fell by 0.98%, bidding farewell to the new high set last Friday, closing at 522.89 points, with a cumulative decline of 0.41% in September. On Monday, European stock sectors generally declined, with only the oil and gas sector rising by 0.24%. In September, the European healthcare and automotive components sectors both decreased by over 6%, the oil and gas index fell by 5.51%, while the basic materials sector increased by over 8.9%.

Auto stocks fell by 4%, leading the decline as multiple car companies issued profit warnings. Stellantis fell by 14.72%, as it revised down its annual profit margin forecast due to a slowdown in the automotive market and increased competition, planning to reduce production and increase promotional expenditures. Aston Martin, a British luxury car manufacturer, saw a significant drop of 24.51% as the company downgraded its full-year guidance. Renault in France fell by 5.57%, Porsche in Germany by 4%, Volkswagen by 2.02%, Daimler by 2.44%, and BMW by 2.42%.

Most luxury goods concept stocks fell, with Kering Group dropping by 3.75%, L'Oreal down by 2.93%, Hugo Boss by 2.51%, LVMH by 2.12%, Burberry by 1.27%, Hermes by 1.16%, and L'Oreal by 0.96%. Most saw gains in September, with Hugo Boss leading the way with an increase of 7.85%, followed by L'Oreal with a rise of 5.24%, Burberry with 4.97% increase, LVMH with a rise of 2.11%, Hermes with 1.71% increase, and L'Oreal with a 1.37% rise. However, Richemont dropped by 5.42%.

The German stock index fell by 0.76%, with a cumulative gain of 2.21% in September. The French stock index dropped by 2%, with a cumulative gain of 0.01% in September. The Italian stock index fell by 1.73%, with a cumulative decline of 0.72% in September. The UK stock index fell by 1.01%, with a cumulative decline of 1.67% in September. The Spanish stock index fell by 0.76%, gaining 4.17% in September. The Dutch stock index fell by 0.80%, with a cumulative decline of 0.93% in September.

Powell's hawkish tone drove the two-year US Treasury yield up by about 10 basis points on Monday, narrowing the cumulative decline in September to nearly 26 basis points. Lagarde's speech raised investors' expectations of an ECB rate cut in October, with the two-year German bond yield falling by over 32 basis points in September.

• U.S. Treasuries: At the close, the more sensitive two-year US Treasury yield rose by 9.63 basis points to 3.6554% before Chairman Powell said, 'If the economy performs as expected, the Summary of Economic Projections (SEP) will indicate that the FOMC will take action twice, with a total rate cut of 50 basis points'. It then rose to 3.6677%, hitting a daily high but still registering a cumulative decline of 26.31 basis points in September. The yield on the 10-year US benchmark Treasury rose by 5.13 basis points to 3.8019%, with a cumulative decline of 10.54 basis points in September.

• Eurozone Bonds: The yield on the German benchmark 10-year bond fell by 1.0 basis point, with a cumulative decline of 17.6 basis points in September. The two-year German bond yield fell by 0.9 basis points, with a cumulative decline of 32.4 basis points in September. The yield on the French 10-year bond dropped by 0.1 basis point, with a cumulative decline of 10.6 basis points in September. The yield on the Italian 10-year bond rose by 0.1 basis point, with a cumulative decline of 24.8 basis points in September. The yield on the UK 10-year bond rose by 2.6 basis points, with a cumulative decline of 1.2 basis points in September.

After Powell's remarks on Monday, US bond yields rose across the board, with the two-year US Treasury yield rising by 10 basis points. However, in September, US bond yields all fell, with a greater decline in short-term US bond yields.

After Powell's speech, the US dollar index widened its gains, but it fell for three consecutive months and declined by over 0.9% in September. The Japanese yen fell more than 1% to challenge 144, but posted a 1.6% increase in September, and a cumulative increase of over 10% in the third quarter. The offshore renminbi against the US dollar experienced its steepest decline of 350 points, briefly breaking below 7.01 yuan. It rose by nearly 830 points in September, an increase of 1.2%, marking a three-month continuous increase and a 3.8% increase in the third quarter. It hit a 16-month high of nearly 6.97 yuan last Thursday. The offshore renminbi rose by over 800 points in September, marking three consecutive months of increase. Bitcoin saw a historical 7% increase in September, the second highest on record for the month.

• Dollar: The US Dollar Index, which measures the dollar against a basket of six major currencies, rose by 0.38% to 100.761 points. It fell by 0.92% in September, spending most of the month in a downward trend and dropping to 100.157 points on September 27 at 20:30 Beijing time.

• Bloomberg Dollar Index rose by 0.30% to 1222.81 points. It declined by 0.93% in September, dropping to 1216.47 points on September 25.

• Non-dollar currencies saw widespread gains in September: the Euro against the US dollar fell by 0.23%, with an accumulated increase of 0.82% for the month. The British Pound against the US dollar remained relatively stable, with a cumulative increase of 1.89% in September. The US dollar rose against the Swiss Franc by 0.63%, while falling by 0.49% in September. Among commodity currencies, the Australian Dollar rose by 0.17%, marking a 2.22% increase in September. The New Zealand Dollar rose by 0.08%, with a cumulative increase of 1.60% in September. The US dollar against the Canadian Dollar rose by 0.08%, with a 0.26% increase for September. The Australian Dollar reached a 19-month high, while the New Zealand Dollar hit a 14-month high.

• The Japanese Yen fell towards 144 during trading: at the end of the session, the Japanese Yen against the US dollar fell by 0.98% to 143.60 yen, with a cumulative increase of 1.72% in September. It had climbed to 139.58 yen on September 16. The Japanese Yen against the Euro fell by 0.72% to 159.89 yen, marking a 0.98% increase in September; against the British Pound, the Japanese Yen fell by 0.97% to 192.075 yen, with a 0.11% decline in September showing a V-shaped reversal.

• Offshore Renminbi (CNH): The offshore renminbi fell by 258 points towards the end of the session, reaching 7.0074 yuan. Overall trading during the session ranged between 6.9735-7.0139 yuan. It saw an increase of 826 points in September, marking the third consecutive month of increase, matching the number of consecutive months seen in January, when it had risen by a total of 5795 points.

• Cryptocurrencies fell across the board on Monday. The largest market cap leader Bitcoin fell 3.14% in the closing price to $64,065.00, accumulating a 7.38% increase in September, trading in the range of $53,255.00-67,135.00 within the month. The second largest Ethereum fell 2.18% at the closing price to $2,627.50, with a 3.16% increase in September.

OPEC+ plans to increase production in December, combined with weak demand from oil-importing countries, the tense situation in the Middle East failed to support oil prices. Both WTI and Brent crude oil have seen a continuous decline for three months, with a 6.2% and 6.7% drop in September respectively, while U.S. natural gas rose 17% in September.

• WTI crude oil for November futures closed down $0.01, a decrease of 0.01%, at $68.17 per barrel. It declined over 6.16% in September. Pre-market European stocks pushed U.S. oil to a nearly 1.7% daily high, breaking above $69.30. Intraday, European stocks pushed U.S. oil down by nearly 0.9% to around $67.50.

• Brent crude oil for November futures closed down $0.21, a decrease of 0.29%, at $71.77 per barrel. It dropped by approximately 6.71% in September. Pre-market European stocks pushed Brent oil to a nearly 1.7% daily high, climbing above $73.10. Intraday, European stocks pushed Brent oil down by over 1% to around $71.20.

• Natural gas futures for November in the U.S. closed up 0.72% at $2.9230 per million British thermal units, marking a 17.01% increase in September. The European benchmark TTF Dutch natural gas futures closed up 0.99% at €38.350 per megawatt-hour, declining by 2.29% in September. ICE UK natural gas futures dropped by 0.26% to 96.150 pence per therm, with a 7.80% decrease in September.

Powell's hawkish remarks triggered a rally in the US dollar and treasury yields, combined with profit-taking and a surge in Chinese stocks, putting pressure on gold prices to drop more than 1.4%. However, gold still rose more than 5.2% in September, driven by the Fed's 50 basis point rate cut and escalating tensions in the Middle East. Spot gold once reached a historical high of $2685.42, up 13% this quarter, the best since early 2020.

• Gold: COMEX December gold futures fell 0.47% to $2655.50 per ounce in the closing, with a cumulative increase of 4.74% in September. Spot gold rose nearly 0.3% to approach $2670 in early Asian trading, then continued to decline. After Powell's speech, it refreshed a daily low near $2620, down 1.41% at the close to $2634.58 per ounce, with a cumulative increase of 5.24% in September, reaching a new high of $2685.58 on September 26.

• Silver: COMEX December silver futures fell 1.58% to $31.420 per ounce in the closing, with a cumulative increase of 7.81% in September. Spot silver rose over 0.7% to break through $31.80 in early Asian trading, then continued to decline. After Powell's speech, it refreshed a daily low by nearly 2.4% near $30.80, down 1.29% at the close to $31.1595 per ounce, with a cumulative increase of 9.16% in September, also rising to a monthly high of $32.7148 on September 26.

• London industrial basic metals rose in September on average. "Copper Doctor" rose by 1.54% to $9829 per ton, with a cumulative increase of 6.43% in September. LME Zinc closed up $2, with a cumulative increase of over 6.69% in September. LME Aluminum closed down 1.32%, with a cumulative increase of 6.74% in September. LME Tin rose by over 1.65%, with a cumulative increase of about 3.44% in September. LME Lead closed down 1.13%. LME Nickel rose by 3.05%, with a cumulative increase of 4.46% in September.

• COMEX copper futures fell 1.05% to $4.5510 per pound, with a cumulative increase of 8.05% in September.

• Goldman Sachs reiterated its bullish recommendation on gold, raising the price target for early 2025 to $2900 per ounce (previously expected $2700). A research report from CSC Securities believes that the US's loose monetary policy stimulates its financial attributes, while China's policy provides support for commodity attributes, opening up a price space for industrial metals driven upwards by the dual attributes of finance and commodities.

Editor/ping