As of press time,$Dow Jones Industrial Average (.DJI.US)$Decreased by 0.58%, $Nasdaq Composite Index (.IXIC.US)$ Decreased by 0.92%, $S&P 500 Index (.SPX.US)$ Decreased by 0.67%.

On Monday, both the S&P 500 index and the Dow Jones hit all-time record highs. On that day, JPMorgan's Chairman Jerome Powell stated that in the next steps of the interest rate policy, the central bank has 'no preset course.' He mentioned that if the economic performance meets expectations, it is expected to cut interest rates twice this year - by 25 basis points each time.

Powell said that following the significant 50 basis point rate cut last month, the central bank may stick to gradual cuts of 25 basis points each, as new data has strengthened confidence in economic growth and consumer spending.

On Tuesday, traders expected a 40% probability of the Fed cutting interest rates by 50 basis points next month, down from 53% on Friday. They anticipate a total rate cut of 70 basis points this year.

Invesco's Asset Management company strategist David Chao stated: 'I still believe that in the current macro backdrop and greater resilience than previously expected growth, global risk assets will perform well by the end of the year. Therefore, the recent market narrative has shifted from concerns about the US economic slowdown to focusing on the scale and speed of the Fed's interest rate cuts within the year.'

Typically, the US stock market performs the worst in September during a year. However, this year the US stocks have defied this trend, with all three major indices posting monthly gains. This is the first time since 2019 that the S&P 500 Index has posted gains in September. In September, the Dow rose by 1.85%, the Nasdaq rose by 2.68%, and the S&P 500 Index rose by 2.02%.

Furthermore, in the just-ended third quarter, the S&P 500 Index, the Dow, and the Nasdaq all recorded gains - the Dow rose by 8.2%, the Nasdaq rose by 2.6%, and the S&P 500 Index rose by 5.53%.

The Fed's decision to cut rates by half a percentage point at the September monetary policy meeting boosted the performance of the US stock market post the meeting. Investors are now focusing on Friday's September non-farm payroll report, which will serve as the next catalyst for major indices.

Morningstar's Chief US Market Strategist Dave Sekera said: 'The risk for US stocks may currently be on the downside. As the Fed begins implementing a loose monetary policy by cutting rates by 50 basis points instead of the usual 25, the real question is, 'Does the Fed think that employment and the unemployment rate are weaker than the market expects?'

The US stock market is still monitoring the strike of members of the International Longshoremen's Association on the East Coast and Gulf of Mexico. Although consumers may not feel immediate pressure, this strike could cause billions of dollars in losses to the US economy every day.

Analysts say that dockworkers at major ports on the East Coast and Gulf of Mexico are going on strike, which could affect the world's largest economy and trigger political turmoil in the weeks leading up to the US presidential election.

The total throughput of the affected ports accounts for half of the total US trade volume, and the strike will disrupt container goods and automobile transportation. Energy supply and bulk goods such as city garbage and road salt will not be affected. The strike will not impact military cargo transport or cruise traffic.

JPMorgan stated that the strike will cost the US economy $3.8 billion to $4.5 billion per day.

In terms of economic data, the US Bureau of Labor Statistics' August Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday morning. S&P Global US Manufacturing Purchasing Managers' Index and ISM Manufacturing Purchasing Managers' Index are also scheduled for release.

In overseas economic data, the Eurozone's inflation data for the 20 countries to be released on Tuesday will show a slowdown from 2.2% in August to 1.8%, lower than expected, reaching the lowest level since mid-2021. Prior to this, data released by European countries have also been below expectations.

ECB President Lagarde stated on Monday that the central bank is increasingly confident that inflation will fall to the 2% target. Lagarde said this will be reflected in the ECB's next policy actions, hinting that traders have been betting on rate cuts since last week's weakening business activity data in the region's growth prospects.

Michael Brown, Senior Strategist at Pepperstone, said, "The market continues to readjust its dovish expectations for the ECB, with more and more traders betting on rate cuts in October."

Focus stocks

Growth tech stocks show divergence, with Apple dropping nearly 3%, Tesla and Microsoft dropping over 1%, while Meta rises by nearly 1%.

China concept stocks show mixed performance, with Ke Holdings rising by nearly 5%, Li Auto Inc. rising by nearly 4%, Alibaba and JD.com rising by over 2%.

$Apple (AAPL.US)$ Dropping nearly 3%, Barclays mentioned weak demand for iPhone 16, maintaining a reduced rating on Apple with a target price of $186.

$Meta Platforms (META.US)$Rising nearly 1%, the stock price once again reaches new highs during trading, with the company announcing on Tuesday to expand its artificial intelligence innovation investments in Vietnam, including producing the latest virtual reality devices starting from 2025, marking the company's latest efforts to expand its business in Vietnam.

$Boeing (BA.US)$ Falling nearly 1%, foreign media reports that Boeing will consider raising at least $10 billion through issuing new shares.

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