The only Wall Street major bank, Citigroup, which still expects a 50 basis point rate cut in November, has also capitulated. Market expectations for a Fed rate cut have been reduced to less than 50 basis points by the end of the year for the first time since August 1, with an expected 21 basis point rate cut in November.

Investors are accelerating the sell-off of US stocks, with all sectors generally declining. Only the energy sector closed higher due to the surge in oil prices. AMD's stock price skyrocketed by nearly 16% after announcing that it will ship 0.1 million GPUs quarterly. Investors are concerned about the situation of Tesla's Robotaxi listing, the future of Apple's AI phone, Google's app store ban ruling, leading to a general decline among the Magnificent 7 technology giants. China concept stocks rebounded in a V-shape, closing higher after dropping nearly 3%, outperforming the broader US market.

The two-year and 10-year US Treasury yields rose above 4% for the first time since August, with gold prices falling for three consecutive days. The US dollar hovering at a seven-week high, with US stocks falling, driving safe-haven currencies such as the Swiss franc and Japanese yen to perform strongly, along with Japanese FX officials warning against speculative trading on the recent depreciation of the yen, providing support for the yen. Due to market concerns about Israel attacking Iranian oil infrastructure, combined with Hurricane "Milton" upgrading to a Category 5 hurricane, oil prices rose for the fifth consecutive day, with Brent crude closing above $80 for the first time since August.

In Europe, ECB board members Villeroy de Galhau and the Governor of the Bank of France, Villeroy, both indicated that a rate cut in October is very likely. However, the most hawkish ECB board member, Holzmann, stated that the ECB must not announce victory over inflation too early, as core inflation in the Eurozone remains too high.

The three major US indices all fell by about 1%, with investors accelerating the selling of US stocks at the end of the afternoon session, refreshing daily lows - the Nasdaq fell by over 1.3%, the S&P by over 1.1%, and the Dow by over 1.2%, while small-cap indices dropped by more than 1.4%. Only the energy sector benefited from the surge in oil prices and closed higher.

• US stock indices all fell. The S&P 500 fell by 55.13 points, or 0.96%, closing at 5695.94 points. The Dow, which is closely related to economic cycles, fell by 398.51 points, or 0.94%, to 41954.24 points. The Nasdaq, with predominantly tech stocks, fell by 213.95 points, or 1.18%, to 17923.90 points. The Nasdaq 100 fell by 1.17%. The Nasdaq Tech Market Cap Weighted Index (NDXTMC), which measures the performance of tech component stocks in the Nasdaq 100, fell by 1.05%. The Russell 2000 small-cap index, more sensitive to economic cycles, fell by 0.89%. The VIX fear index rose by 17.86% to 22.64.

• US industry ETFs generally fell, with energy ETFs leading the way with a rise of over 0.3%. Utility ETFs fell by 2.3%, consumer discretionary and internet stocks ETFs fell by about 1.5%, financial industry ETFs and biotech stock index ETFs fell by at least 1.2%, global tech stock ETFs fell by over 0.9%, tech industry ETFs fell by about 0.7%, semiconductor ETFs rose by 0.16%, and energy industry ETFs rose by 0.35%.

• The 11 sectors of the S&P 500 index generally declined. The utility sector fell by 2.32%, telecoms and consumer discretionary sectors fell by over 1.9%, financials by over 1.2%, real estate and information technology/tech sectors by about 0.7%, and the energy sector rose by 0.35%.

• On the news front, Bloomberg data shows that as of October 4, nearly $6 billion flowed into US-listed emerging markets and specific country ETFs, reaching a new high in over a year. Among them, five major ETFs investing in Chinese stocks attracted about $4.9 billion, an unprecedented scale. During the National Day holiday, traders shifted focus to futures listed in Singapore and Hong Kong, with open contract quantities for the FTSE China A50 Index futures on the Singapore Exchange hitting a record high. Goldman Sachs pointed out that clients are most concerned about whether funds are flowing from India to China, and the answer is undoubtedly yes.

• "Magnificent 7" with only Nvidia rising. Nvidia rose by 2.24%, while Apple fell by 2.25%. Jefferies downgraded its rating, saying investors are overly optimistic about AI phones. Reports say Apple plans to release Apple Intelligence and iOS 18.1 on October 28, and Apple has not abandoned Micro LED technology. AR glasses featuring Micro LED are expected to be mass-produced in 2026, competing with Meta Orion's AR glasses. Tesla fell by 3.7%, Microsoft by 1.57%. Google A fell by 2.44% after a judge's ruling that Google's app store must allow competitors' apps to be listed. Meta fell by 1.87%, Amazon by 3.06%, and Wells Fargo & Co downgraded Amazon's rating from overweight to neutral with a target price of $183.

• Chip stocks showed mixed performance. The Philadelphia Semiconductor Index fell by 0.19%, while the industry ETF SOXX dropped by 0.27%. NVIDIA's double long ETF rose by 4.52%. TSMC ADR increased by 1.85%, Micron Technology rose by 0.76%, ARM Holdings rose by 0.56%, AMD rose by 0.04%, while Intel fell by 0.93%, Qualcomm dropped by 1.16%, Broadcom dropped by 0.88%, and KLA Corp fell by 0.73%.

• AI concept stocks had mixed results. Super Micro Computer rose by 15.79%, marking its best single-day performance since May 15, with the company announcing that its quarterly shipments of AI GPUs exceeded 100,000 units. Serve Robotics rose by 11.74%, BigBear.ai rose by 1.99%, NVIDIA-backed AI voice company SoundHound AI rose by 1.07%, C3.ai rose by 0.08%. On the other hand, Dell Technologies fell by 1.1%, CrowdStrike dropped by 1.8%, BullFrog AI dropped by 3.35%, Snowflake dropped by 0.78%, Oracle dropped by 0.52%, and Palantir dropped by 2.8%.

• China concept stocks outperformed the U.S. market. The Nasdaq Golden Dragon China Index was up by 0.07%, while the China Technology Index ETF (CQQQ) rose by 6.43%. The China Internet Index ETF (KWEB) rose by 1.2%, FTSE China 3x Bull ETF (YINN) rose by 13%, FTSE China 3x Bear ETF (YANG) fell by 13.41%, RONDHL CHINA ETF (DRAG) rose by 3.12%, Xtrackers Harvest CSI 50 (ASHS) rose by 9.99%, Deutsche Bank Guo Shi Shanghai and Shenzhen 300 Index ETF (ASHR) rose by 7.98%. FTSE A50 futures rose by 1.98%, hitting a new high since mid-December 2021.
  

• Among popular China concept stocks, Mengniu Dairy ADR rose by 10.52%, Meituan ADR rose by 4.51%, Li Auto Inc rose by 4.18%, Zeekr rose by 4.01%, Baidu rose by 3.63%, Alibaba rose by 2.61%, Tencent ADR rose by 2.6%, Xpeng rose by 2.11%, Nio Inc rose by 0.3%, JD.com rose by 0.23%, Fangdd Network dropped by 14.23%, Bilibili dropped by 4.03%, Netease dropped by 2.72%, New Oriental dropped by 1.29%, PDD Holdings dropped by 0.76%.

• Other key stocks: Aggressive investor Starboard Value holds approximately $1 billion in Pfizer shares, with Pfizer rising by 2.17%.

European stocks continued to rise on Monday, ending the trend of continuous declines since Thursday last week:

The STOXX 600 index in Europe rose by 0.18%, closing at 519.48 points. The Eurozone's STOXX 50 index rose by 0.30%. Among the sectors, houseware stocks led the gains with a 0.97% increase, while technology stocks fell by 0.65%.

Germany's DAX 30 index fell by 0.09%. France's CAC 40 index rose by 0.46%. Italy's ftse MIB index rose by 0.66%. The UK's FTSE 100 index rose by 0.28%. The Netherlands' AEX index rose by 0.11%. Spain's IBEX 35 index rose by 0.5%.

Strong nonfarm payrolls, coupled with rising oil prices, have raised concerns among investors about the risk of a rebound in US inflation, prompting the market to lower expectations of interest rate cuts by the European, American, and British central banks. The yields on US 2-year and 10-year Treasury notes rose above 4% intraday for the first time since August, with European bonds following the decline in US bonds:

• US Bonds: At the close, the more interest rate-sensitive 2-year US Treasury yield rose by 7.76 basis points to 3.9994%, briefly rising more than 10 basis points to 4.0223% intraday, accumulating an increase of 39.71 basis points over the past four trading days. The benchmark 10-year US Treasury yield rose by 5.64 basis points to 4.0236%, trading between the 3.9653% - 4.0314% range, approaching the August 1st high of 4.0642% and previously rising to 4.7351% on April 25th.

• Euro Area Bonds: At the close, the 10-year German bond yield, the benchmark in the euro area, rose by 4.6 basis points to 2.256%. The 2-year German bond yield rose by 4.4 basis points to 2.247%. The 10-year UK bond yield rose by 7.8 basis points, and the 2-year UK bond yield rose by 8.4 basis points. The 10-year French bond yield rose by 4.0 basis points, and the 10-year Italian bond yield rose by 6.3 basis points.

The US dollar hovered near a seven-week high on nonfarm payroll day. Most non-US currencies fell, with the British pound falling for seven consecutive days. However, safe-haven currencies like the Japanese yen performed well, briefly rising above 148 intraday, offshore Chinese yuan strengthened, rising by 272 points, and Bitcoin rose by over 0.8%, testing above $65,000.

• Dollar: The US Dollar Index DXY fell by 0.03% to 102.493 points, with an intraday trading range of 102.620-102.368 points, moving away from the highest level of 102.687 points since the non-farm payroll day (October 4) on August 16. The Bloomberg Dollar Index rose by 0.03% to 1238.67 points, with an intraday trading range of 1236.91-1239.25 points.

• Non-US currencies mostly declined: The euro against the US dollar remained roughly flat, the British pound against the US dollar fell by 0.31%, the US dollar against the Swiss franc fell by 0.46%; Among commodity currencies, the Australian dollar against the US dollar fell by 0.70%, the New Zealand dollar against the US dollar fell by 0.58%, and the US dollar against the Canadian dollar rose by 0.39%.

• Yen: The Japanese yen rose by 0.35% against the US dollar to 148.17 yen, with an intraday trading range of 149.13-147.86 yen.

• Offshore Renminbi (CNH): The offshore Renminbi against the US dollar rose by 272 points at the close, reaching 7.0712 yuan, with overall trading in the range of 7.1010-7.0581 yuan during the session. The CME Group stated that trading volume of offshore Renminbi futures on its platform surged to a record high, with strong demand seen throughout the year for Renminbi spot and futures products.

• Cryptocurrencies: The largest market value leader Bitcoin rose by 0.82% at the close to $0.063 million, trading in the range of $62,615.00-$64,770.00 during the day. The second largest Ethereum rose by 0.51% at the close to $2445.50.

Market continued to worry about Israel's strike on Iran's oil infrastructure, coupled with concerns about Hurricane 'Milton' affecting U.S. Gulf Coast refineries, oil prices rose for the fifth consecutive day, U.S. oil closed up 3.7% at a six-week high, while Brent oil rose to $80 for the first time since August.

• WTI November crude oil futures closed up $2.76, or 3.71%, at $77.14 per barrel, up 18.42% since the closing on September 10th. U.S. oil rose steadily throughout the trading day, reaching a high of nearly 4.1% at $77.40 during the final hours of trading.

• Brent December crude oil futures closed up $2.88, or 3.69%, at $80.93 per barrel, marking the first time above $80 since August 12th and a 17.58% rebound since September 10th. Brent oil surged steadily throughout the session, reaching a peak of nearly 4% and breaking through $81.10 during the final hours of trading.

• Analyst viewpoint: Wood Mackenzie's Vice President of Oil Markets, Alan Gelder, stated on Monday that the market is currently only anticipating an Israeli attack on Iran's oil facilities, but the real threat lies in the potential disruption of shipping in the Strait of Hormuz. The strait serves as a 20% global crude oil export channel, and if Iran retaliates against an Israeli attack by blocking the strait, it would heavily impact global oil prices. Analysts warn that the current Middle East tension has not yet resulted in oil supply disruptions, but the longer the conflict persists, the greater the risk. Goldman Sachs points out that if Iranian oil supply is disrupted, Brent oil could soar to the $90 range, with the extent of the increase depending on OPEC's ability to offset the supply gap.

• On the news front, Hurricane 'Milton' rapidly intensified to 175 miles per hour, prompting President Biden to declare a state of emergency in Florida, USA.

• Natural Gas: U.S. November natural gas futures fell by 3.78% to $2.7460 per million British thermal units. The European benchmark TTF Dutch natural gas futures fell by 0.18% to €40.925 per megawatt-hour. ICE UK natural gas futures rose by 0.40% to 103.010 pence per therm.

The strong employment situation makes the Fed's expectation of a substantial rate cut in November completely non-existent, putting pressure on the gold price for three consecutive days:

• Gold: COMEX December gold futures fell 0.20% to $2662.50 per ounce at the close. Spot gold continued its earlier upward trend during European stock trading, rising over 0.2% to approach $2660. It then continued to decline, hitting a pre-market low of nearly 0.6% below $2640 in the U.S. market. It fell 0.41% to $2642.74 per ounce at the close, bidding farewell to the historical high of $2685.42 set on September 26th.

• Silver: COMEX December silver futures fell 1.39% at the close, to $31.945 per ounce. Spot silver saw a slight increase at the start of the Asian market session, but then continued to decline. It hit a pre-market low in the U.S. of over 2.4%, approaching $31.40. It fell 1.67% to $31.6850 per ounce at the close.

• On the news front: The People's Bank of China paused its gold purchases for the fifth consecutive month. Peter A. Grant, Vice President and Senior Metals Strategist at Zaner Metals, stated that despite the short-term strength of the dollar hindering gold from reaching new highs, gold still has the potential to reach $2700 in the short term and even $3000 in the long term, especially with the upcoming U.S. elections and geopolitical tensions.

• London industrial metals mixed: Dr. Copper, the economic indicator, fell by 0.14% to $9930 per ton. Lead in London fell by $1 to $2148 per ton. Zinc in London rose by $8 to $3174 per ton. Aluminum in London rose by $5 to $2658 per ton. Tin in London rose by $100 to $33905 per ton. Nickel in London rose by 0.33% to $18052 per ton.

• COMEX copper futures fell by 0.43% to $4.5545 per pound.

Editor/Lambor