On the evening of the 8th Beijing time, the US stocks opened higher on Tuesday, with major indices rebounding slightly after yesterday's decline. U.S. bond yields continue to rise. Crude oil futures prices fell. This week, the market is focusing on the minutes of the Fed meeting, September CPI inflation data, and the upcoming earnings season.

As of the time of publication, the three major indices showed divergent trends, with the Nasdaq rising nearly 1%, the S&P 500 up 0.53%, and the Dow slightly down.

On Tuesday morning, U.S. bond yields continued to rise, with the 10-year Treasury yield rising by 1.7 basis points to 4.043%, having previously risen to 4.051% at one point.

On Monday, the West Texas Intermediate (WTI) crude oil futures rose to over $77 per barrel, but fell by about 2% in early trading on Tuesday. Oil market traders continue to monitor the situation in the Middle East. It is expected that Israel will retaliate against Iran's large-scale ballistic missile attack.

Since October, the US stock market has been experiencing continuous volatility due to growing concerns among investors about escalating Middle East conflicts.$S&P 500 Index (.SPX.US)$After a cumulative increase of 2% in September, the market has already dropped by 1.1% in October so far.

Following the release of a significant employment report, the U.S. stock market rebounded slightly last week, with the Dow Jones Industrial Average even hitting a record high close on Friday.

However, this enthusiasm has gradually waned this week as investors now believe that the Fed may not take such aggressive measures when cutting interest rates in the future, given the still strong labor market conditions.

Traders have significantly revised their expectations for the Fed's monetary policy easing this year. The strong employment report released last week provided confidence in Fed Chair Powell's statements. Powell had expressed that the Fed will stick to the consistent 0.25 percentage point rate cut, following a significant rate cut in September which marked the start of a loose cycle.

According to the CME Group's FedWatch tool, the market no longer expects a 50 basis point rate cut at the Fed's November meeting, but believes there is an 87% chance of a 25 basis point cut. As of December, the market has only priced in a 50 basis point rate cut, which is less than the over 70 basis points a week ago.

Chief Technical Strategist Larry Tentarelli of the Blue Chip Daily Trend Report said regarding labor market data: "Initially, the market rebounded due to this strong economic data. What you are seeing now, I believe, is the market adjusting to the rise in bond yields."

Several Federal Reserve officials are scheduled to speak on Tuesday, including Board Governor Adriana Kugler, New York Fed President Williams, Boston Fed President Susan Collins, and Atlanta Fed President Raphael Bostic.

Fed Governor Kugler stated on Tuesday that she "strongly supports" the Fed's decision to cut rates by 50 basis points last month, with the focus still on inflation. If inflation continues to ease as she expects, she will support further rate cuts.

Kugler mentioned that the Fed should continue to strive to bring the inflation rate down to the 2% target but should take a "balanced approach" to avoid "undesirable slowdowns" in job growth and economic expansion.

The dot plot released by the Fed after the September rate meeting shows that officials expect further 50 basis point rate cuts at the remaining two meetings in 2024. Kugler stated that if "inflation progresses as expected," she will support further rate cuts, but she noted several risk factors.

"I am closely monitoring the impact of hurricanes and geopolitical events in the Middle East on the economy, as these events could affect the economic outlook of the United States," Kugler said. "If the downside risks to employment intensify, it may be necessary to more quickly shift policy to a neutral stance."

New York Fed President Williams stated on Tuesday that following the 50 basis point rate cut in September, it would be appropriate for the Fed to cut rates again "over time." He stated: "Right now, I think monetary policy is well-positioned for the outlook. If you look at the economic forecast summary, you'll find it's a very good baseline, the economy will continue to grow, and inflation will return to 2%."

On Tuesday's economic data, due to the expansion of the service trade surplus and the rebound in commodity exports, the US trade deficit in August narrowed to the lowest level in five months.

Data released by the US Department of Commerce on Tuesday showed that the merchandise and services trade deficit contracted by 10.8% from the previous month to $70.4 billion. The trade deficit in August narrowed by $8.5 billion, the largest decrease since March 2023. The latest data aligns with the median forecast of economists surveyed by Bloomberg. Exports increased by 2%, while imports declined by 0.9%. This data is not adjusted for inflation.

The sharp decline in industrial supplies imports affected overall imports, mainly due to the lower crude oil prices during the month. The rise in consumer goods imports may reflect US retailers increasing overseas orders at major ports in the country ahead of planned worker strikes. The strikes ended last week after three days and more negotiations are expected before January 15 next year.

US commodity exports surged due to increased exports of capital goods and motor vehicles.

Although the drag of merchandise and service trade on GDP in the second quarter reached its highest since early 2022, the latest net export data shows some reduction in the impact. After adjusting for inflation, the merchandise trade deficit narrowed to $88.6 billion in August, the smallest deficit since February.

The market's focus this week is on Thursday's Consumer Price Index (CPI) data. The report is expected to show that core inflation's year-on-year growth rate in September remains at 3.2%, unchanged from August.

Senior Analyst Ipek Ozkardeskaya of UBS Bank stated, "If the CPI data on Thursday turns out to be weak enough, it may ultimately help soothe the tense sentiment of the dovish Federal Reserve."

Several major US banks will officially kick off the earnings season this Friday. Investors will closely watch the guidance provided by the companies for the coming quarters, especially crucial as they formulate the outlook for 2025.

Investors continue to focus on the Middle East crisis. After a year-long war, the battles on multiple fronts in the Middle East escalated on Monday, with Hezbollah firing rockets at Haifa, the third largest city in Israel. Israel seems prepared to expand its attack on Lebanon. The Israel Defense Forces stated that they intercepted the vast majority of rockets fired by Hamas and other Iran-backed organizations towards Tel Aviv.

Focus stocks

Growth tech stocks are generally rising $NVIDIA (NVDA.US)$ 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%. $Apple (AAPL.US)$Please use your Futubull account to access the feature.$Tesla (TSLA.US)$ Rose more than 1%.

China concept stocks collectively pull back. $Bilibili (BILI.US)$ Drop more than 13%. $Alibaba (BABA.US)$ Drop nearly 7%. $JD.com (JD.US)$ Dropped more than 6%.$PDD Holdings (PDD.US)$Photovoltaic solar stocks weakened,$Baidu (BIDU.US)$,$NIO Inc (NIO.US)$and$Trip.com (TCOM.US)$ Declined by over 7%.

China assets ETFs are generally experiencing a significant decline, $Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$ decreasing by 30%, $Direxion Daily FTSE China Bear 3X Shares ETF (YANG.US)$ Rising by over 35%.

$NVIDIA (NVDA.US)$ Up over 3%, Nvidia Co-CEO Huang Renxun's CES blockbuster is scheduled and will release the RTX 50 series graphics cards.

$Tesla (TSLA.US)$ Rising by over 1%, the company will release the third-quarter financial report for 2024 on October 23 (October 24 Beijing time). After the financial report is released, the company will hold an earnings conference at 4:30 PM on October 23 Eastern Time (4:30 AM on October 31 Beijing Time).

On Thursday, October 10th, at 7:00 PM local time (10:00 AM on October 11 Beijing time), Tesla will hold a "Robotaxi Day" demonstration event at the Warner Bros. studio in Los Angeles. It is expected that Tesla will announce its progress in autonomous driving cars and robot technology. For Tesla CEO Elon Musk, he faces a daunting task on that day: convincing investors that Tesla is not just a car company.

This long-awaited event, originally scheduled for August, aims to further reinforce a concept that Tesla has been promoting: that it is first and foremost a technology company, and secondly a car company. At the end of September, Musk posted a message titled "We, Robot" on the social platform, X, stating that this will be "one for the history books". Due to high expectations for this event, when it was initially delayed, Tesla's stocks were significantly affected.

$Apple (AAPL.US)$ Rising more than 1%, the 2024 fiscal year fourth quarter earnings report will be released on October 31st (November 1st Beijing time).

$Super Micro Computer (SMCI.US)$ Opening high and then falling, dropping nearly 5%, previously the stock rose nearly 16% on Monday.

$PepsiCo (PEP.US)$ Rising nearly 1%, on the news front, PepsiCo's net revenue for the third quarter was lower than expected, and shareholder profit attributable decreased by 5.24% year-on-year.

Editor/Emily